New York Attorney Malpractice Blog

Hinshaw reports this months old case about legal fee disgorgement.  We reported on it about a month ago.  Wilson Elser, a big defense firm which handles legal malpractice defense cases, unsuccessfully defended itself on this case.

"Ulico Casualty Company (“Ulico”) is an insurer that specializes in trustee and fiduciary liability insurance. In the early 1980s Ulico entered into managing general agency agreements with Professional Indemnity Agency, Inc. and Professional Intermediary Associates, Inc. (collectively “PIA”) for PIA to serve as its underwriting agent for this book of business. As part of this agreement, the Wilson, Elser, Moskowitz, Edelman & Dicker firm would serve as claims attorneys to handle claims for coverage made by Ulico insureds, as well as provide general claims handling and oversight. The retainer in effect at the time of this controversy provided that “Wilson, Elser shall devote all the time necessary to the business of the Company, but shall not by this retainer be prevented or barred from taking other employment of a similar or other legal character by reason of the employment herein specified.” Id. at 2.

Subsequently, PIA became concerned about Ulico’s declining Best rating and business practices. PIA decided to enter an agreement to place the business with Legion Insurance Company (“Legion”). PIA hoped to move 50 percent to 75 percent of the business from Ulico to Legion. Id. at 3. Wilson, Elser advised PIA that its managing general agency agreement with Ulico was not exclusive and drafted a managing general agency agreement for use by PIA and Legion. Wilson, Elser also prepared filings necessary to obtain regulatory approvals from the state insurance departments for Legion to provide the insurance. The filings included an endorsement to permit Legion to offer more favorable coverage than Ulico and enhance Legion’s competitive position. Id. at 4. Wilson, Elser also offered advice to PIA about strategy regarding the termination of its relationship with Ulico. The court noted it was “undisputed” that in four instances, Wilson, Elser engaged in dual representation of Legion and Ulico on claims by insureds for coverage when both companies had policies that could apply. Id. at 5.

After terminating its relationship with both PIA and Wilson, Elser, Ulico filed suit against Wilson, Elser claiming breach of fiduciary duty, aiding and abetting PIA’s breach of fiduciary duty, legal malpractice, tortious interference with contract and tortious interference with prospective economic advantage. Id. at 6. Ulico moved for summary judgment on the issue of breach of fiduciary duty and for an order that Wilson, Elser return legal fees it received during the period of alleged disloyalty. Id. at 1.

The court noted that “the conflict of interest on which the fiduciary duty claim is premised did not affect Wilson Elser’s representation of Ulico in any litigation, but consisted, rather, in advancing the business interests of certain clients, PIA and Legion, to the detriment of another client, Ulico.” Id. at 10. The court found this situation presented an “egregious” breach of fiduciary duty because the attorney “fostered the business interests and advanced the competitive position of certain clients not over a former client but over a client which the attorney still represented…The undisputed facts…demonstrate that Wilson Elser did not merely assist PIA with preliminary steps to set up a competing business, but rather assisted PIA at every stage of PIA’s plan to transfer Ulico’s TFL business from Ulico to Legion.” Id. at 12.

The fact that the parties had respective expert opinions on the issue of the breach did not create an issue of fact because the existence of the duty and its breach presented questions of law for the court. Id. at 14. The breach does not require the actual use of client confidences but only the “reasonable probability” that they will be disclosed. See Jamaica Public Serv. Co. Ltd. v. AIU Ins. Co., 92 N.Y. 2d 631 (1998). In light of the fact that Wilson, Elser had been Ulico’s claim counsel for more than 10 years, it held confidential information it had acquired from Ulico regarding insureds, premiums, rates, loss experience and profitability, which would have been very useful to Legion in competing with Ulico. Ulico at 15. The court easily rejected the argument that the retainer language about the ability to take other or similar employment allowed this conduct, as it fell far short of the complete disclosure required to obtain the client’s informed consent to this conflict of interest. Id. at 16.

Finally, the court turned to appropriate damages. The court rejected Wilson, Elser’s argument that the fees subject to forfeiture should be only those for services where there was a breach of fiduciary duty. When there is a persistent pattern of disloyalty, “the cases ordinarily order forfeiture without apportioning or limiting the forfeiture to fees for services performed with disloyalty.” Id. at 21. Because the monthly fee structure between Ulico and Wilson, Elser was “tantamount” to a salary and could not be broken down by individual tasks, the court held that the forfeiture of fees should cover all regular monthly fees paid during the period of disloyalty. Id. at 22. The court ordered further proceedings to determine whether, as Ulico contended, the amount to be disgorged equaled $3,420,612.05.

Significance of Case
As a general proposition, the representation of competing businesses vis a vis third parties is permissible without conflicts waivers. Here, as elsewhere, however, the devil is in the details. Where the matters being handled for the competing businesses are as related and the interests of the clients are as plainly adverse as this court found them to be, a critical line has been crossed. And even in the absence of actual harm to a client, one of the consequences of crossing such a line can be a forfeiture of fees "

Attorneys move from firm to firm more often now than in the past.  The NYLJ and Law.Com's top articles are all about firms reconstituting themselves, and movement of lawyers from hither to yon.

Here is a case from New Jersey about a successful legal malpractice case in which plaintiff recovers from one set of defendants, but has to take an assignment of insurance rights from the second set.  The insurance carrier started to defend under a reservation of rights, and then successfully withdrew.

"The governing legal principles are firmly established. An insurance company may respond to a claim against its insured by advising the insured that it is willing to defend under a reservation of rights or "non-waiver agreement." Merchants Indem. Corp. of N.Y. v. Eggleston, 37 N.J. 114, 126 (1962); Griggs v. Bertram, 88 N.J. 347, 357 (1982). Under such an agreement, the insurance company cannot be held ultimately responsible for payments otherwise required by the insurance policy. The agreement may be "inferred from the insured's failure to reject the carrier's offer to defend with a reservation of rights." Merchants, supra, 37 N.J. at 126. But "to spell out acquiescence by silence," the reservation of rights letter "must fairly inform the insured that the offer may be accepted or rejected." Id. at 127-28.

The first judge held that the letter in question failed the test set out in Merchants because it did not literally say you may "accept or reject" the offered defense. But the case does not stand for the proposition that its exact words have to be employed. Here, the letter "specifically disclaimed[ed] coverage for any . . . alleged act, error, or omission that occurred prior to the policy's retroactive date" and for any member of RRMKK. The letter did not in any way reflect or even suggest a unilateral decision by Harleysville"

"An example of an improper unilateral declaration by an insurance company of its intention to defend while reserving the right to disclaim appears in Sneed v. Concord Insurance Co., 98 N.J. Super. 306, 314 (App. Div. 1967)(the company "'will continue to investigate this matter, but reserves any and all of its rights under the policy contract and may at any time, disclaim liability thereunder'"). By contrast, the language used by Harleysville comports with the reservation of rights letters sustained in Neilson v. American Mutual Liability Insurance Co. of Boston, 111 N. J. L. 345, 349 (E.& A. 1933)("'If this is not agreeable to you, we will return the summons and complaint for such action as you think advisable.'"). We perceive no difference between that statement and Harleysville's statement that it was "prepared" to defend "if" the insureds were willing "to accept the reservation," particularly when the letter expressly declined coverage for the only period of time during which the insureds could have had responsibility for Kuhn's actions and suggested that they might want "to retain personal counsel to protect their uninsured interests." In short, because Rubin and Kaplan had been properly notified of the reservation of rights and had not suffered any prejudice from the timing of Harleysville's withdrawl, they had no enforceable claim to the benefits of the malpractice insurance policy.

Relying primarily on Merchants and Griggs, the Scottos and Rubin and Kaplan argue that even if the reservation of rights letter effectively preserved Harleysville's rights, there is liability nevertheless because Harleysville did not disclaim for over three years and finally disclaimed while the malpractice case was still pending. Both of those cases are distinguishable because they involve untimely reservation of rights letters, which is not the case here. While those cases would be pertinent by inference if Rubin and Kaplan had suffered prejudice because of the timing of Harleysville's withdrawal, there was no prejudice here since the "settlement" required nothing of Rubin and Kaplan other than an assignment of rights. "

This woman was the victim of a rape and assault in a housing complex, due to lax security.  Attorneys hired to sue the building didn't show up for trial.  Now she has settled the legal malpractice case against the attorneys.

The Appellate Division, Second Department recognized that there had been potential legal malpractice in the way this law firm handled equitable distribution in this case, and its failure to protect its client.  Wife was client, husband had real property, and due to a failure to file a lis pendens, the real property became part of his bankruptcy estate, rather than the clients. 

"The Firm's contention that it did not depart from the ordinary standard of care applicable to an attorney in a matrimonial action involves factual issues not properly resolved in the context of a motion to dismiss or for leave to amend (see Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d 925). Moreoever, the Firm did not demonstrate that notices of pendency could not have been filed pursuant to CPLR 6501 in the underlying divorce action, since Hirsch not only asserted a claim for equitable distribution pursuant to Domestic Relations Law § 234, but also asserted fraudulent conveyance and constructive trust causes of action which demanded judgment that would affect title to the properties, and successfully sought issuance of a temporary restraining order and the appointment of a receiver to manage all of the properties at issue (see Ehlinger v Ruberti, Girvin & Ferlazzo, supra; Resnick v Doukas, 261 AD2d 375; Elghanayan v Elghanayan, 102 AD2d 803; Leibowits v Leibowits, 93 AD2d 535, 556; cf. Sehgal v Sehgal, 220 AD2d 201; Fakiris v Fakiris, 177 AD2d 540). "

At this stage of the proceedings, Hirsch need not establish actual damages, but is only required to set forth allegations from which damages attributable to the defendant's alleged malpractice might be reasonably inferred (see Kempf v Magida, 37 AD3d 763; InKine Pharm. Co. v Coleman, 305 AD2d 151). The proposed amended pleading met this standard by alleging that the filing of a notice of pendency would have provided constructive notice of Hirsch's claims in the divorce action and thereby prevented the eight properties from becoming part of the estates in bankruptcy of the Trust Entities and/or of Hirsch's former husband (see CPLR 6501; 11 USC 544[a]; Goldstein v Gold, 106 AD2d 100, 102, affd 66 NY2d 624; In re Borison, 226 BR 779, 787-788; In re Eadie Properties, Inc., 31 BR 812, 814-815). As the Firm did not demonstrate that these allegations are palpably insufficient as a matter of fact or law, leave to amend the counterclaim [*3]should have been granted and the motion to dismiss denied.

It seems that everyone involved in this case of suspected child abuse did the correct thing, which was to report the suspected behavior.  All were sued, and all gained dismissal. The case.

.KAPLAN V. PUCKETT (2006-SC-18-DG)

Here is a legal malpractice case from Kentucky, with briefs.

"Legal malpractice. Puckett was found guilty of arson-related murder. Puckett was acquitted at new trial granted because prosecution witness had withheld exculpatory evidence at first trial. Puckett subsequently prevailed in legal malpractice action against original defense counsel. The issue is whether the malpractice verdict may stand in light of the withheld evidence."
Discretionary review granted 8/17/2006
Jefferson Circuit Court, Judge F. Kenneth Conliffe
For Movant: George R. Carter
For Respondent: Bill V. Seiller

Appellant’s Brief
Appellee’s Brief
Appellant’s Reply Brief
COA OPINION: 2004-CA-001750 (PDF)

This attorney prosecuted class actions for big settlements.  Now his millions in fees is in jepordy, based on the allocation of expenses between the groups of clients. The Story.

"Three former clients of trial lawyer John O'Quinn could be receiving millions of dollars back after an arbitration panel ruled the prominent Houston attorney improperly deducted expenses from settlements he won for them.

The three-person panel could decide this month if O'Quinn would have to give back any money. O'Quinn could be forced to return the $18.9 million in expenses plus all of his fees, estimated to be $580 million.

A March panel decision obtained by the Houston Chronicle showed a majority thought the deduction of a total of $18.9 million from the plaintiffs' settlements was improper. The decision also said the 1.5 percent of general expenses collected by O'Quinn from the women were not authorized by his client contracts. "

Baker Donnelson reports that the US Supreme Court has issued a ruling in Bell Atlantic Corp. v. Twombly an anti-trust case which may revolutionize pleading in all civil cases. 

"In an antitrust case decided on May 21, 2007, the United States Supreme Court abandoned a fifty-year-old liberal pleading rule in favor of a significantly tougher standard applicable to all civil cases that may make it more difficult for plaintiffs to sue and easier for defendants to end lawsuits early, avoiding expensive litigation. The Court's rejection of the old standard is unequivocal: the court's old formulation, quoted for half a century in numerous opinions of the Supreme Court and the lower courts, "is best forgotten as an incomplete, negative gloss on an accepted pleading standard."

THEIR CONCLUSION?\

"For fifty years, courts have evaluated all civil complaints under the standard set forth in Conley v. Gibson, 355 U.S. 42 (1957), which allowed cases to proceed through the process of pre-trial discovery unless, based on the claims alleged in the complaint, the plaintiff could prove "no set of facts in support of his claim which would entitle him to relief." This meant that under Conley, a case brought under the labor and employment laws, a plaintiff needed only to make allegations that put defendants on notice of what the plaintiff's claims were without asserting all of the facts that supported the plaintiff's conclusion that the law had been violated. As long as some set of facts might exist to support the plaintiff's conclusions, the case could go forward. But in Twombly, the Supreme Court rejected this standard, noting that it has "earned its retirement."

The Supreme Court's new standard asks not whether it is conceivable that some set of facts could be developed to support the allegations in the complaint, but rather whether the plaintiff has stated enough facts in the complaint to allow a court to conclude that it is plausible that the plaintiff is entitled to relief. Thus, defendants can avoid the costs and burden of responding to a complaint and to a plaintiff's request for discovery by convincing the judge that the plaintiff's claims are implausible even if they might be remotely possible. Conley was not an antitrust case, and the Court's rejection of Conley was not limited to antitrust cases. It is likely, therefore, that this new pleading standard will be adopted in civil cases generally. "

A sometimes defense in legal malpractice is "preemption."  The defense would be that regular rules of legal malpractice do not apply because a federal or state law has so occupied the field, that its rules take over.

Here is a short blurb about ERISA not preempting the field for a legal malpractice case.

Here is a blog blurb from an Indiana Case:

"In Norman R. Carlson, Jr., et al v. Sweeney, Dabagia, Donoghue, Thorne, James & Pagos, et al, a 28-page opinion dealing with questions of alleged attorney malpractice in will drafting, Judge Robb writes:

Norman R. Carlson, Jr., individually, and as executor of the estates of Norman R. Carlson and Hilda D. Carlson, and as Trustee of the Trust established under the last wills and testaments of Norman Sr. and Hilda, Margaret Ann Carlson, Beth Carlson Montigue, and David R. Carlson, (when referred to collectively, the “Carlsons”), filed a complaint against the law firm of Sweeney, Dabagia, Donoghue, Thorne, Janes and Pagos, and lawyer John H. Sweeney (the “Lawyers”), alleging legal malpractice that resulted in adverse tax consequences. The Lawyers filed a motion for summary judgment, raising two issues. The trial court denied the Lawyers’ motion as to one issue, but granted it as to the other. The Carlsons now appeal, raising a single issue, which we restate as whether the trial court properly granted summary judgment based on its determination that reformations to the Wills drafted by the Lawyers effectively eliminated any malpractice that occurred relating to the drafting of the original Wills. On cross-appeal, the Lawyers raise a single issue, which we restate as whether the trial court properly denied its motion for summary judgment on the grounds that the original Wills would result in adverse tax consequences. The Lawyers also raise the following issues: 1) whether the “substantial adverse interest exception” protects the Carlsons from adverse tax consequences; 2) whether the Carlsons have brought this suit too early, as the IRS has not yet assigned a tax penalty; and 3) whether the trial court improperly considered the opinion of an attorney hired by the Carlsons. We conclude the adverse interest exception does not protect the Carlsons, the Carlsons are not precluded from bringing their suit at this time, and that the Lawyers waived their argument relating to the opinion of the expert witness by not raising it before the trial court. We further conclude that the trial court properly found that the original Wills would result in adverse tax consequences, and affirm the trial court’s denial of the Lawyers’ motion for summary judgment on that issue. However, we conclude that the reformations did not effectively avoid potential adverse tax consequences, reverse the trial court’s grant of summary judgment on that issue, and remand for further proceedings. * * *

Conclusion We conclude that the trial court properly determined that the original Wills did not establish an ascertainable standard regarding a Trustee’s ability to invade the trust corpus; that the “adverse interest” clause does not protect the Trust from tax liability; and that the Carlsons did not bring this suit prematurely. Therefore, we affirm the trial court’s denial of the summary judgment motion on these grounds. We also conclude that the reformations did not comport with Indiana law, and that the trial court therefore improperly granted summary judgment. We therefore reverse the trial courts grant of summary judgment and remand for further proceedings."

AVVO a new lawyer search web site is up and  running. "a online legal services startup led by Expedia veteran Mark Britton, is unveiling its website after more than a year of development.

Avvo.com allows consumers to search for lawyers by name, practice area, or location and get ratings and profiles for them. The website is free to consumers and supported by online advertising.

Each lawyer's profile includes license status, disciplinary sanctions, practice areas, education, a list of awards and publications, as well as client ratings and peer endorsements. The site gives lawyers an overall rating based on their experience and record.

Avvo collects its information from public sources including courts, state bar associations and law firm websites. Client ratings and peer endorsements are submitted by visitors to the site.

Avvo is the brainchild of Britton, who previously served as general counsel at Bellevue online travel site Expedia Inc. (NASDAQ: EXPE). "

Yes, it is still good in Legal Malpractice, and Yes it is still good in Medical Malpractice, but the Court of Appeals took a big, big step yesterday, and ruled that it was not applicable to accountants filing yearly tax returns, or yearly accountings.  PriceWaterhouse won the case, and  Judge Theodore Jones wrote the decision.Law.Com reports on the decision:

"The doctrine of continuous representation cannot be invoked in situations where accountants are providing "separate and discrete" annual audits to clients and not more extensive accounting services, the State of New York Court of Appeals ruled unanimously Thursday.

The decision in Williamson v. PricewaterhouseCoopers LLP , 64, had been anxiously awaited in the accounting industry since the Appellate Division, 1st Department, ruled last year that PricewaterhouseCoopers had a continuous relationship with two failed hedge funds it audited annually.

This was the first time the court weighed in on the continuous representation doctrine in an accounting context. The opinion was written by Judge Theodore T. Jones. "
In deciding that PricewaterhouseCoopers did not have a continuous representation relationship with the hedge funds, Lipper Convertible and the Lipper Fixed Income Fund, the court relieved PricewaterhouseCoopers of malpractice liability for the five years, from 1995 to 1999, it audited the funds' year-end financial statements and declared them a reasonable indication of the funds' financial positions.

Missing Documents can be a lawyer's nightmare.  Here is a follow up on the Qualcom story from American lawyer:

"A week after the public learned of Qualcomm Inc.'s bombshell admission that it withheld potentially thousands of important documents in a high-stakes patent trial against Broadcom Corp., many in the intellectual property community are still buzzing about the gaffe.

The case is even more striking because the attorney who has publicly apologized for Qualcomm's error has a strong reputation in his field, as does his firm. Yet several attorneys say it's still too early to assign blame for the error.

"Whenever there are accusations of concealment of evidence and they prove to be true, there definitely is going to be harm to the lawyers and the parties," said Anup Tikku, an IP associate with Kirkpatrick & Lockhart Preston Gates Ellis, who has followed the case closely. "What I find difficult to understand is how Qualcomm interviewed witnesses, put them on the stand and did not realize these documents existed."

Ross Todd at the American Lawyerwrites:

"San Diego City Attorney Michael Aguirre, who has already led the city's charge to sue two Am Law 100 firms, has a third in his sights. In an April report, Aguirre recommended that the city take legal action against Willkie Farr & Gallagher because of what Aguirre called a "failed" investigation into the city's $1.4 billion understatement of its pension debt. Aguirre says that Willkie Farr overbilled the city and produced a report that was "a mile wide and an inch deep."

Willkie Farr partner Michael Young, responding to requests for comment on behalf of himself and partner Benito Romano, said, "We are not going to express our views on the matter."

The San Diego pension scandal has given rise to multiple lawsuits. In late 2005 the city sued long-time bond counsel Orrick, Herrington & Sutcliffe, among other advisers, claiming that the firm knowingly approved inaccurate financial disclosures. Then, in July 2006, the city sued Vinson & Elkins, alleging that V&E ran up a $6 million bill while conducting a flawed investigation of the pension fiasco. Both cases are moving toward discovery, according to Dan Stanford of San Diego's Stanford and Associates, the city's outside counsel in each case. "

Bad faith litigation is usually a situation where the case could be settled within the policy limits, but that chance is lost and the verdict exceeds the policy limits.  Here is the inverse.  The carrier settles a case within the policy limits but the insured [in this case a doctor] did not want to settle, and sues the carrier for settling in bad faith.

"A Florida appellate court has recognized a new statutory bad faith cause of action in medical malpractice claims. In Rogers v. Chicago Ins. Co.,1 the fourth district court of appeal held that an insured has a private cause of action under section 627.4147, Florida Statutes, which requires that settlement offers be made in good faith and in the best interests of the insured.

In Rogers, a medical doctor sued his professional liability insurer for failing to properly investigate the malpractice claim filed against him, as required by section 766.106,2 Florida Statutes. He alleged that the insurer had acted in bad faith under section 627.4147 by settling a completely defensible claim, causing him damages such as his inability to obtain medical malpractice insurance, which limited his practice.

In 1985, the Florida Legislature enacted section 627.4147, titled “Medical malpractice insurance contracts.” Subsection 627.4147(1)(b) provides that it is against public policy for any insurance policy to contain a clause giving the insured the exclusive right to veto a settlement offer within the policy limits. It also provides that “any offer of admission of liability, settlement offer, or offer of judgment made by an insurer or self-insurer shall be made in good faith and in the best interests of the insured.”

Will this principal spread to legal malpractice?

Its bad enough when an attorney makes mistakes which cost the client.  Here, its not even an attorney!  The NY TImes Story:

"A Long Island man who worked as a lawyer at a major New York law firm for four years — even though, prosecutors said, he had never gone to law school — pleaded not guilty yesterday in State Supreme Court to charges of impersonating a lawyer and stealing at least $284,350 in salary from his firm."

This report from Hinshaw discusses a Georgia case in which an attorney did not file a verification in an anti-SLAPP suit.  It was a mistake, but the question of whether he had to file a verification was "unsettled."  So far, [summary judgment denied], the client's legal malpractice case remains viable.  Moral ?  Advise the client of unsettled law .

"Chatham Orthopaedic Surgery Center, LLC., et al. v. White, 640 S.E.2d 633 (Ga. Ct. App. 2006)

Brief Summary
The court upheld summary judgment in favor of an attorney on the issue of negligence in failing to file a necessary verification under an anti-SLAPP statute because prior case law was unclear at the time. Nonetheless, the court reversed summary judgment in the attorney’s favor on a separate claim to the effect that the attorney was negligent in not advising his client of the risk of not filing a verification in light of the unsettled state of the law. "

General Obligation Law Sec. 15-108 has long been a trap and a well known trap at that.  Settle with one defendant, and the rest of them get to try their case against an empty seat, and get the greater of the settlement amount or the equitable share of the settling defendant.

But, as of Today new legislation changes all of that!

CHAPTER TEXT:
LAWS OF NEW YORK, 2007

CHAPTER 70

AN ACT to amend the general obligations law, in relation to the impact
of litigation settlements upon the remaining parties to the action

Became a law June 4, 2007, with the approval of the Governor.
Passed by a majority vote, three-fifths being present.

The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:

Section 1. Section 15-108 of the general obligations law is amended by
adding a new subdivision (d) to read as follows:
(d) Releases and covenants within the scope of this section. A release
or a covenant not to sue between a plaintiff or claimant and a person
who is liable or claimed to be liable in tort shall be deemed a release
or covenant for the purposes of this section only if:
(1) the plaintiff or claimant receives, as part of the agreement,
monetary consideration greater than one dollar;
(2) the release or covenant completely or substantially terminates the
dispute between the plaintiff or claimant and the person who was claimed
to be liable; and
(3) such release or covenant is provided prior to entry of judgment.
§ 2. This act shall take effect on the thirtieth day after it shall
have become a law and shall apply to all releases or covenants not to
sue effective on or after such effective date.

Here is the sponsor's memo:

"SPONSORS MEMO:NEW YORK STATE SENATEINTRODUCER'S MEMORANDUM IN SUPPORTsubmitted in accordance with Senate Rule VI. Sec 1
BILL NUMBER: S3739

SPONSOR: DEFRANCISCO

TITLE OF BILL: An act to amend the general obligations law, in
relation to the impact of litigation settlements upon the remaining
parties to the action

This measure, a predecessor of which the Legislature passed in 2006, is
one in a series of measures being introduced at the request of the Chief
Administrative Judge on the recommendation of his Advisory Committee on
Civil Practice. The 2006 measure contained a technical defect that
required its disapproval (see Veto #259-2006). This current draft
corrects that technical defect.

This measure would amend section 15-108 of the General Obligations Law
("G.O.L.") to exclude certain releases from its scope, most importantly
including those instances in which the plaintiff voluntarily discontin-
ues his or her suit against a particular defendant without receiving any
monetary consideration for that release. This would encourage plaintiffs
to voluntarily release those defendants who appear not to bear any
liability, which would in turn reduce the litigation costs of those
ostensibly blameless defendants. The amendment would also make many
summary judgment motions unnecessary, and would thus reduce the burden
on the court system.

Section 15-108 of the G.O.L prescribes the consequences which ensue when
a tort plaintiff releases from liability one or more, but fewer than
all, of the alleged tortfeasors. In broad strokes, current G.O.L.
§15-108 applies when a plaintiff settles with a "tortfeasor" (usually,
but not invariably, a defendant). In such event, current subdivisions
(b) and (c) provide that the settling tortfeasor can neither seek
contribution from the other tortfeasors nor be held liable for contrib-
utions to the others, the underlying theory being that the settlor has
brought his or her peace. The settling tortfeasor can, however, seek
indemnification from the other tortfeasors, and may also be sued there-
for.

A significant issue arises when, during the course of discovery, it
appears that a defendant whom plaintiff initially thought might bear
some liability was, in fact, blameless. Because the plaintiff and
plaintiff's counsel generally do not want superfluous parties that must
be served with every single document and consulted about court dates and
deadlines, the plaintiff would generally like to give such a defendant
his or her "walking papers." Of course, that is also what the ostensibly
blameless defendant would like - - to be released immediately and with-
out incurring any further attorney's fees. It is also what the court
system would prefer to happen.

There is, however, a problem. If the plaintiff were to release the
apparently blameless defendant, and if one of the remaining defendants
were to prove at trial that the released defendant was indeed partially
at fault for the plaintiff's damages, then the defendants still left in
the case would be entitled to a reduction of their liability. See

KILLEEN V. REINHARDT, 71 A.D.2d 851,419 N.Y.S.2d 175 (2nd Dept. 1979).
In that case, the plaintiff's magnanimous discontinuance would result in
a reduction of the plaintiff's damages, and in under compensation. Such
a reduction, which in theory could amount to a significant percentage of
plaintiff's economic and non-economic loss, could occur even though the
plaintiff did not receive any consideration for the discontinuance, and
it could occur even if none of the facts or claims establishing the
culpability of the released defendant had been asserted, or known, when
plaintiff discontinued.

This feature of G.O.L. §15-108 may be a trap to those unfamiliar with
the statute, but it is well known to experienced plaintiff's counsel.
Their reaction is precisely what one would expect. Knowing that a volun-
tary discontinuance can cost the plaintiff thousands or even millions of
dollars if new facts and new theories point the finger of blame at the
released defendant, and also knowing that there is no risk of any such
penalty if the ostensibly blameless defendant instead moves for and
receives summary judgment from the court, the plaintiff's attorney will
typically answer a request for a discontinuance by saying, to extricate
yourself, you must make a summary judgment motion.

In this situation in which an ostensibly blameless defendant seeks to
drop out of the lawsuit, the other defendants might not mind if that
occurs. . . provided that they, the other defendants, can commence their
own third-party claims if and when it seems wise to do so, for they too
are concerned that a defendant who now appears blameless may later
appear to bear some responsibility. The problem, from their perspective,
is that they will not be allowed that choice. If plaintiff discontinues
against the ostensibly blameless defendant, then, per the current stat-
ute, that defendant cannot be sued for contribution. And if the osten-
sibly blameless defendant moves for and receives summary judgment, then
that defendant is forever free from liability. . . no matter what turns
up later on. For these reasons, the remaining defendants are virtually
forced to oppose the summary judgment motion, even if they would have
preferred to provisionally allow the movant to leave, so long as there
is any arguable basis for opposition.

Thus, what might have been a consensual discontinuance instead becomes a
contested motion, and, perhaps, after the motion is resolved, a
contested appeal.

The proposed amendment would eliminate three kinds of releases from the
statute's scope, but only two of the exclusions constitute changes as
compared to current law.

First and foremost, discontinuances given without monetary consideration
would be removed from the statute's scope, meaning that a plaintiff
could discontinue without risk of being penalized for doing so. This
would help the ostensibly blameless defendants to get out of the case as
quickly and as inexpensively as possible. It should be noted that, in
an instance in which the plaintiff initially sued and thereafter
released an individual or corporate entity without monetary consider-
ation for the release, the remaining defendants' rights against that
released individual would be exactly the same as if the individual had
never been sued in the first place. More specifically, the remaining
defendants would have the same rights that they would have initially had
to implead the individual and thereby seek contribution or indemnity or
to instead seek a CPLR Article 16 set-off by reason of the individual's
culpability. Of course, under the terms of Article 16, the Article 16
set-off would apply only to the plaintiff's non-economic loss, and then
only if the party seeking the set-off was assigned 50% or less of the
culpability.

Second, by limiting the statute to those releases that "completely or
substantially" terminate the dispute against the released defendant, the
new subdivision would effectively exclude "high- low" agreements in
which the parties agree to confine the damages to an agreed range. The
subdivision would also effectively exclude agreements in which the
parties merely narrow the issues (perhaps, by conceding liability, or
jurisdiction) without fully resolving the action.

The exclusion of high-low agreements constitutes a change, although the
current rule is not well-settled. The exclusion of other issue narrowing
agreements may or may not constitute a change; the current rule is not
clear enough to say. In any event, the "completely or substantially
terminates" limitation is not the main point of the amendment, and is
not likely to have as pronounced an impact as the "greater than one
dollar" limitation. However, the Committee advocates the "completely or
substantially terminates" provision because there is no policy reason
why issue-narrowing agreements should be deterred or why such agreements
should engender windfall consequences for the other parties.

The exclusion of post-judgment settlements would be a codification of
current law. The Court of Appeals long ago ruled that the statute does
not apply to post-judgment settlements, and that rule has never been
seriously questioned since then. The proposal codifies that rule because
(1) the rule sensibly allows the plaintiff to accept a partial payment
from one defendant who may have no other assets except for his or her
personal possessions, and to do so without unintentionally releasing the
other defendants, and (2) adoption of a new, statutory exclusion that
did not expressly recognize the existent, common-law exclusion could
conceivably be construed as a rejection of it.

This measure, which would have no fiscal impact on the State, would take
effect 30 days after such time as it shall have become law, and it shall
apply to all releases or covenants not to sue effected on or after such
effective date. "

Proving mistakes by an attorney is really the least difficult aspect of litigating a legal malpractice case.  Technical aspects of the action, such as timelyness, pleading, proximate cause, and privity often overshadow a simple analysis of mistakes.

Here is a case from Michigan in which the attorney filed a divorce action in the wrong county!  Howver, plaintiff could not demonstrate damages.  They tried gamely to show that the plaintniff had to rent an apartment in the next county, and had to spend money to move around.  Result?  No damages.

Often, a losing criminal defense attorney will. because they are usually really sympathetic guys, go to bat for a client by allowing the client to 'give them up."  This usually comes up at an ineffective counsel application by the defendant.  Here is a prime example:

"A defense attorney tried a different argument for why his convicted client should be given a new murder trial: the attorney was too sleepy.

Charles R. Curbo wrote in a motion for a new trial that he could not properly represent the defendant, Tony Wolfe, because he was tired during the six-day trial in January.

"The court constantly rushed defense counsel, who the court knew had little sleep on account of the hours that the court was keeping for no good reason," Curbo wrote.

But Assistant District Attorney General David Zak, who prosecuted the case, said he saw no lack of enthusiasm from the defense.

"I saw no change in legal ability from Monday to Saturday," Zak said. "The defense attorney showed anger, passion and zeal in representing his client. There was never a moment when he was running out of gas."

Wolfe was convicted of first-degree murder for shooting 27-year-old Leondus Hawkins in September 2004 at a service station parking lot. He was sentenced to life in prison.

But both sides said the trial held long and late hours due to the defendant's medical condition and because the judge wanted to send the sequestered jury home as quickly as possible.

Wolfe required dialysis treatments every other morning and kept the trial from starting until early afternoon for some days. The proceedings went on until 10 or 11 p.m. on some days.

"My client is already worn out from dialysis and they make him stay up there until 11 at night and he can't remember his name hardly," Curbo said.

Attorney 1 started a trip and fall case against City and Contractor A.  After two years he was substituted out, and Attorney 2 started a new action against Contractor B.  The two actions were consolidated and eventually Contractor A won the case.  Contractor B paid $ 100,000 and the City paid $ 50,000.

Is Attorney 1 entitled to fees?  Is Attorney 2 entitled to Fees? 

"The motion, by order to show cause, of plaintiffs' attorney, Theodore Oshman, Esq., of Oshman & Mirisola, LLP (hereinafter "movants") [Attorney 2] for an order restoring this matter to the active calendar, allowing plaintiffs' counsel to deposit all proceeds in its escrow account to allow for the distribution of funds to the plaintiffs and setting this matter down for a hearing on the issue of attorney's fees, is granted.

The cross-motion by plaintiffs' former attorney, Barry S. Gedan, Esq., {Attorney 1]  for an order disqualifying plaintiffs' current attorneys from receiving any attorneys' fee in this action upon grounds of misconduct by them, requiring the plaintiffs' current attorneys to refund to the plaintiffs their entire claimed contingent attorneys' fee plus disbursements, declaring that the entire portion of the settlement proceeds, in the amount of $50,000, be paid by defendant, The City of New York (hereinafter "City"), Barry S. Gedan, Esq., or in the alternative, requiring that the City deposit the $50,000 settlement in this action in an interest bearing account at Mr. Gedan's bank, requiring the movant to provide a detailed list of the legal services it provided on behalf of the plaintiffs and requiring that the movant provide Mr. Gedan with a copy of the file in this case, is denied in its entirety.
Mr. Gedan is entitled to recover in quantum meruit, " . . . the fair and reasonable value of the services rendered . . . " Lai Ling Cheng v. Modansky Leasing Co., Inc., 73 N.Y.2d 454 (1989); Judiciary Law §475. However, Mr. Gedan is entitled to recover for services rendered to the plaintiffs in the initial action involving the City only. In Cataldo v. Budget Rent A Car Corp., 226 A.D.2d 574 (2nd Dept. 1996), the court stated, " . . . before an attorney can be granted a lien pursuant to Judiciary Law §475 he or she must have appeared for the client by 'participating in a legal proceeding on the client's behalf or by having his [or her] name affixed to the pleadings, motions, records, briefs, or other papers submitted in the matter'" (citations omitted). Mr. Gedan did not represent the plaintiffs in the action against Columbus and he has failed to demonstrate that any of the work he performed resulted in the lawsuit against Columbus. He has not demonstrated that he is entitled to any fees from the settlement in the action involving Columbus as he did not commence the action against Columbus and had no involvement in that action whatsoever.

Accordingly, Mr. Gedan is only entitled to recover for services rendered in the initial action involving the City. Movants are permitted to deposit the proceeds of the settlement involving the City in its escrow account pending a determination of the fees Mr. Gedan is entitled to receive. Moreover, movant is permitted to distribute the plaintiffs' share of the funds. Plaintiff, Melia Rothfeder is now more than eighty-four (84) years of age and is entitled to her share of the funds without having to wait for a determination in the fee dispute involving her present and former attorneys. "

Attorney Harry H. Kutner, Jr. had fees overdue and he was waiting for the client to pay.  Sound familiar?  Today's NYLJ , written by Daniel Wise reports:

"The retainer agreement, drafted by Mr. Kutner, gave Mr. Antonacci 15 days from the time a bill was sent out to make payment without being assessed interest.

In the event payment was not made within 15 days, the agreement explained that a 16 percent interest rate would be assessed to "encourage your prompt raising of any disputed time or services billed" and "to prevent an outstanding balance from being a source of friction between you and me, thereby protecting the fragile attorney-client trust arrangement."

In the agreement, Mr. Kutner also explained that he was charging 16 percent interest because, otherwise, in effect, he would be subsidizing a loan to Mr. Antonacci who would have had to pay at least 16 percent to borrow the funds on his credit card. "

"A requirement in a retainer agreement compelling a client to pay 16 percent interest on unpaid fees is excessive and unenforceable, a Nassau judge has ruled.

Instead, the client must pay interest on the unpaid fees at a rate of 9 percent, the amount of interest allowed by statute to be collected, both pre- and post-judgment, on amounts found collectible by courts, District Court Judge Gary F. Knobel ruled in Kutner v. Antonacci, 36363/06. [subscription]

When an attorney represents a soon-to-be testator, and there are problems after death, several principles of legal malpractice law arise: privity, statute of limitations, proximate cause.  Here is a NJ case which discusses several of the issues and gives a well written account of how the principles play out. 

Plaintiff is a surviving child, and is joined by her two sisters.  Result is that the estate may have a cause of action, and one sister may have an individual cause of action, but that the two remaining sisters lose.

"Given the wording of the agreement prepared by defendants, Clara may have had a reasonable expectation of representation as an "individual" as well as executrix. Cf. President v. Jenkins, 180 N.J. 550, 562-63 (2004) (insurance policy); Schor v. FMS Financial Corp., 357 N.J. Super. 185, 193-94 (App. Div. 2002) (need for extrinsic evidence). Defendants do not claim they expressly advised her that their representation was limited to her duties and responsibilities as executrix, irrespective of the impact on her as an individual or tax consequences to her personally, and thus it could have been "reasonable" for her to have so understood the retainer. See Restatement (Third) of the Law Governing Lawyers, § 19 (2000); id. at § 19 cmt. c. See also R.P.C. 1.2(c). Moreover, as the Restatement now confirms,

In trusts and estates practice a lawyer may have to clarify with those involved whether a trust, a trustee, its beneficiaries or groupings of some or all of them are clients and similarly whether the client is an executor, an estate, or its beneficiaries. In the absence of clarification the inference to be drawn may depend on the circumstances and the law of the jurisdiction.

[Restatement, supra, § 14 cmt. f.]

See also American College of Trust and Estate Counsel, ACTEC Commentaries on the Model Rules of Professional Conduct, Commentary on MRPC 1.2 (3d ed. 1999). Defendants had an obligation to define the scope of their representation of Clara more clearly. Accordingly, we reverse the grant of summary judgment as to Clara.

B.

The claim of Clara's sisters requires a different evaluation. As such, it must be asked if the "non-clients will rely on the attorneys' representations and the non-clients are not too remote from the attorneys to be entitled to protection." Petrillo, supra, 139 N.J. at 483-84; see also Stewart, supra, 142 N.J. Super. at 593. The non-clients in this case are beneficiaries, and the tax burden affected them individually, if not differently. In deciding the issue before us, the overarching inquiry "involves a weighing of the relationship of the parties, the nature of the risk, and the public interest in the proposed solution." Estate of Fitzgerald, supra, 336 N.J. Super. at 468 (quoting Barner, supra, 292 N.J. Super. at 261 (quoting Goldberg v. Hous. Auth. of Newark, 38 N.J. 578, 583 (1962))). See also Banco Popular N. Am. v. Gandi, 184 N.J. 161, 179-81 (2005); Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993); Restatement, supra, §§ 51, 56 cmt. c. As such, we must consider whether the beneficiaries' interest is adverse to the testator's intent or the interest of the Estate and what the reasonable expectation of the sisters may have been.

Plaintiffs contend that "Lolio was certainly aware of the identity of the two other beneficiaries" and that the beneficiaries' "familial relationship to the executrix . . . is certainly not 'too remote' to absolve [him] from liability for deviations from accepted standards of legal practice[.]" They further assert that Clara "certainly invited her two sisters to rely upon Mr. Lolio's opinion and actions in assisting [Clara] in settling their deceased mother's estate[,]" and that Clara "owed a fiduciary duty to her two sisters of which Mr. Lolio was certainly aware, and his failure to advise that the use of the IRA moneys to pay federal estate taxes exposed Clara Heffernan to liability for breach of her fiduciary duties . . . ."

The winner of the Anna Nicole Smith lottery, who won in part because of his attorney, is now suing her to avoid a $ 600,000 legal bill.  Details.

"Anna Nicole Smith's ex-boyfriend filed a lawsuit Friday against the celebrity attorney who helped him prove he is the father of Smith's baby daughter.

Larry Birkhead's lawsuit, filed in Los Angeles Superior Court, comes three days after lawyer Debra A. Opri filed papers seeking to force him into arbitration to resolve her $620,000 legal bill.

Birkhead's lawsuit alleges legal malpractice, breach of fiduciary duty, conversion and fraud.

Birkhead maintains he is owed $885,000 paid to him by NBC Universal that Opri allegedly placed in a trust account.

He also claims Opri disparaged Smith in the media and attended her funeral despite Birkhead's objections, and that she leaked confidential information to an MSNBC reporter against his wishes as a payback to the reporter for referring Birkhead to her as a client.

According the lawsuit, Opri initially told Birkhead she was a believer in the rights of fathers and would not charge for her services because the case would benefit her legal career. He later paid her $20,000 that she told him were costs associated with the paternity litigation.

Opri, through her spokesman, James C. Levesque, issued a general statement Friday claiming "Mr. Birkhead continues to release misleading information to the media that skirts the issue of his unpaid legal fees."

In addition to the television deal, Birkhead has received millions of dollars from selling photos of his daughter, making him capable of paying his overdue legal fees, according to the statement.

A hearing on Opri's attempt to compel arbitration is set for July 9, according to the statement. "

We reported on this case a week ago, but here is another take on the issue of PA Appeals and vagueness:

"A Pennsylvania Superior Court panel has affirmed the dismissal of a legal malpractice action brought against Fox Rothschild by two brothers who claimed the firm's handling of a family will left their inheritance lighter than it should have been.

However, the majority in Hess v. Fox Rothschild ruled that Philadelphia Common Pleas Judge Annette M. Rizzo had been wrong to reject the brothers' appeal as too vaguely worded.

The case sheds light on a rare theme in the ongoing Pennsylvania Rule of Appellate Procedure 1925(b) saga.

Typically, state court judges have used that appellate procedural rule to bounce an appeal if the appellate statement was too long and/or raised too many issues.

But the rule also directed attorneys not to make their statements overly vague, and a number of appeals were quashed under that provision of the rule.

When the justices approved amendments to Rule 1925 earlier this month, they prospectively precluded judges from nixing an appeal solely because of the number of issues raised. That measure was likely in response to practitioners' gripes that appeals in complex or high-stakes cases might necessarily involve dozens of issues.

But the high court also added new language to the rule that will permit civil litigation appellants to attach to their 1925(b) statements a preface explaining the statement has been phrased in general terms because the appellants don't believe they can "readily discern the basis" for trial judges' decisions. "

Here is a NJ case on legal malpractice insurance coverage for retired partners who continue handling certain matters.

"Thanks to ambiguous and vague policy language, a professional liability carrier will have to cover a law firm partner for malpractice allegedly committed after he left an insured firm, a New Jersey appeals court says.

The judges ruled on May 25 that where a policy limited coverage for a firm's retired partners but not for partners who still practiced law and handled cases referred by the firm, the policy would be read against the carrier, Zurich Specialties London Limited.

"Zurich could have utilized policy language that would have eliminated all ambiguity and which would have put the matter beyond all reasonable question," the judges wrote in Jolley v. Marquess, A-4513-0. "Zurich did not do so; therefore, we construe the ambiguity in favor of coverage, which is the approach long favored in this state."

The judges noted, however, "Our own research, and that of the parties, yields no reported decisions in this state construing this policy language."

In 1997, John Marquess, a partner at what was then Marquess, Morrison and Trimble in Turnersville, N.J., represented defendant Barbara Gorna in an automobile accident case. The case was assigned by Gorna's insurer, American Independent Insurance Co., a client of the firm.

In 2000, Marquess was bought out by his two partners but, with their consent, continued to represent Gorna as a Haddonfield, N.J., solo. No substitution of attorney appears to have been filed.

The same year, a jury found Gorna 100 percent liable for the injuries to the plaintiff, Kimberly Jolley. Without Gorna's consent, Marquess entered into an agreement with Jolley's attorney that Gorna would pay Jolley $750,000, plus interest, in damages. Marquess told Gorna she would not be responsible for the judgment above her $15,000 coverage limit, but that was not stated in the agreement.

Attorney is hired to fix IRS problems.  Tells Client to give he a check, and he will pay the IRS.  Check cashed, IRS not paid, Attorney arrested, and now a legal malpractice case.  Here is the story.

"BENTONVILLE -- A Bentonville attorney arrested on fraud and theft charges has been sued by the mother and son who told police he mishandled amendments to their 2005 federal tax returns and Internal Revenue Service payments.

Rogers attorney Timothy C. Hutchinson filed the suit Wednesday in Benton County Circuit Court on behalf of Carol L. Fountain and Charles Fountain.

Archer was arrested earlier this month on criminal charges related to incidents addressed in the civil suit. He remains in the Benton County Jail in lieu of a $75,000 bond and is set to be arraigned July 2.

The civil suit claims the Fountains retained Archer in April 2006 to handle filing of amended tax returns that included income from an inheritance the Fountains received.

Archer told Carol Fountain she owed $36,000 to the IRS, and he asked the check be made out to him and he would forward the money.

Rather than paying the IRS, Archer cashed and presumably spent the money, the suit claims, and the tax return was never filed. "

This story from law.com:

"A rare U.S. Court of Appeals for the Federal Circuit decision that declared a patent unenforceable because of the patent attorney's inequitable conduct during the patent application process is likely to increase lawyers' disclosures to the patent office.

On May 18, the court upheld a California federal court decision that declared a McKesson Information Solutions August 1989 patent involving bar-coding technology for hospitals unenforceable.

The Federal Circuit agreed with the lower court that patent lawyer Michael Schumann acted with deceptive intent by withholding three key items of information from the U.S. Patent and Trademark Office, including details about prior art and a rejected co-pending patent application.

Schumann, who is now with Minneapolis-based intellectual property firm Hamre, Schumann, Mueller & Larson, declined to comment. "

The details are a little sparse in this story but after losing a $ 6.5 milliion medical malpractice case, the hospital and its attorney are now on the hook for a $ 1.3 million sanction too.

"A Parkersburg-area hospital has been ordered to pay a $1.3 million sanction in a medical malpractice lawsuit. This after a judge says it violated court orders, among other misconduct, during a recent trial.

Wood County Circuit Court Judge Robert Waters imposed the sanction against Camden-Clark Memorial Hospital in an order issued last week.

Waters' order says Camden-Clark's misconduct included inaccurate answers during the discovery process and inaccurate testimony.

This order came from an underlying lawsuit alleging the malpractice in the death of Hilda Boggs.

Boggs died in 2001 following surgery on a broken ankle. "

A Wood County jury found that the anesthesiologist negligently overdosed Boggs with Lidocaine.

The jury in that case awarded $6.5 million to Boggs' estate in March 2006. The case is now being appealed by the hospital. "

We really can't explain it.  Here is the story.  Was it the unhealthy aspect of french fries ?  Was it residual anti-French feelings from the Iraq war?  Would "freedom fries" have been OK?

"Saying a bankruptcy judge was "a few french fries short of a Happy Meal" may cost an out-of-state lawyer the ability to practice in U.S. Bankruptcy Court for the Southern District of Florida.

The comment already has cost Chicago-based McDermott Will & Emery partner William P. Smith his client -- Miami Beach's Mount Sinai Medical Center & Miami Heart Institute.

Bankruptcy Judge Laurel Myerson Isicoff in Miami also slapped the hospital with a restraining order at the same hearing where Smith made his fast-food quip. She found Mount Sinai's anti-competitive actions in the bankruptcy case of South Beach Community Hospital violated bankruptcy law.

During a May 7 hearing, Smith told Isicoff, "I suggest with respect, your honor, that you're a few french fries short of a Happy Meal in terms of what's likely to take place."

Smith's comment and a show-cause order against him were first reported by the legal blog Above the Law.

Smith did not return calls for comment, and Mount Sinai spokeswoman Kathleen Dorkowski declined to comment on the case.

McDermott Will & Emery issued a statement, saying: "We expect our lawyers to observe established rules and protocols of professional conduct in the courtroom. Any departure from that standard is of concern to us, and we look forward to a resolution of this matter."

Plaintiff is injured in a train accident, and wins $3 million.  Law firm and a money manager both get into trouble. The Story:

 Attorney "Lakin was indicted April 23 on charges of cocaine use and distribution as well as transporting a minor male to Malibu, Calif. with the intent to engage in sexual activity. He is free on a $250,000 unsecured bond and his trial is set to begin Jan. 10, 2008, in Benton. "

"Stephen Williams of Chouteau, Okla. filed suit against the Lakins in federal court on Sept. 26, 2006, after his $3 million-plus, tax-free structured settlement with Union Pacific over a 1991 injury was absconded by money manager-turned thief James Gibson"

"U.S. District Judge Claire V. Eagan, chief judge of the Northern District of Oklahoma, entered the judgment on April 18 after the Lakins did not appear in the case, even after being granted extra time to answer. The case was transferred to the U.S. District Court of the Southern District of Illinois on May 24. "

"In April, the Record reported that Lakin's malpractice insurer, the Illinois State Bar Association Mutual Insurance Co., has not paid the firm's clients over the loss of funds.

Clients of Lakin and other firms lost about $50 million eight years ago when Gibson, the manager of their settlement funds, stole the money. "

Lead Plaintiff in a class action is unhappy with settlement amount, and seeks to sue the class action attorney and sues class action attorney in legal malpractice.  Holding:  plaintiff is collaterally estopped from suing.

Hinshaw reports: "J. Michael Koehler v. Jules Brody, et al., ___F.3d___, 2007 WL 895864 (8th Cir. 2007)

Brief Summary

Two years after a court approved a class action settlement, a lead plaintiff brought suit against former class counsel for breach of fiduciary duty and misrepresentation, claiming that the settlement was too low and that it should have been paid in stock to avoid adverse tax consequences. The appellate court affirmed the dismissal of these claims on the ground that the plaintiff was collaterally estopped from suing class counsel to attack the class recovery.

Complete Summary

This case arose out of a global settlement of a number of class action cases related to the merger of NationsBank and BankAmerica into Bank of America. J. Michael Koehler was a lead plaintiff and class representative. The court appointed the firms of Green, Schaaf & Jacobsen, P.C., Chitwood & Harley, and Stull, Stull & Brody as co-lead counsel. A mediation was held in January 2002 under the direction of a former federal district judge. Mr. Koehler and some other lead plaintiffs were present at negotiations but left after two days. The mediation continued and resulted in a $490 million settlement.

Hearings were then held to determine the fairness of the settlement. Mr. Koehler retained separate counsel and objected to the settlement. He felt the settlement was too low and was disproportionately distributed among the shareholder classes. He also felt the settlement was invalid because he had not been present when the settlement agreement was reached, because he allegedly had been misled by counsel and because counsel had allegedly made false representations to the court about his approval that violated the Private Securities Litigation Reform Act of 1995 (the “PLSRA”). Mr. Koehler also alleged other ethical violations by the attorneys, and submitted an expert affidavit from a legal ethics specialist regarding the alleged breaches. Id. at *1. "

Here is a NJ case about legal malpractice insurance coverage for successor attorneys.

"In this appeal, we decide whether a policy of insurance providing coverage for legal malpractice requires the insurer to provide indemnification to a former partner of a law firm for acts of malpractice allegedly committed subsequent to the dissolution of that firm. Under the facts presented, we conclude that the former partner was acting "solely in a professional capacity on behalf of such firm," as required by the policy of insurance and was entitled to a defense and indemnification. Accordingly, we affirm the trial court's grant of summary judgment in favor of defendant John J. Marquess"

Here in the SCOKY Blog we have a list of upcoming KY Supreme Court arguments, complete with briefs and records.  The case of Kaplan v. Puckett appears to be a successful prisoner v. attorney legal malpractice case.

Follow for results!

This "immediate release" letter from whistleblower sounds like an attempt by the client to shame defendants into a settlement.  We are often asked whether shame plays a role in legal malpractice.  Clients often believe that an attorney will settle rather than litigate for fear of having this sort of a press release hit the web.

We saw this on a search for legal malpractice.  How many others read this is unknown.  Do you think this will pressure the attorneys's insurance carrier to settle?

Loeb & Loeb has been using a retainer agreement that required arbitration.  This reported case is the second of two in which Loeb & Loeb has successfully stayed legal malpractice cases in favor of arbitration.  This case held that the Supreme Court Case is stayed whild arbitration goes  forward.  Other courts have held that arbitration of legal malpractice cases runs against public policy.

This story is beyond belief.  Plaintiff is convicted of a crime, and then the conviction is reversed.    However, no one, not his attorney, not the DA, and not the state ever let him out!  Result?  He stayed in jail for 17 years after reversal.

"Although the Michigan Court Appeals in 1989 overturned his 1987 conviction because inadmissible evidence was used against him, no one ever acted on the court's order. It just sat there while Heyerman sat in prison -- for an incredible 17 years. His original attorney did nothing to challenge his imprisonment.

The government was equally at fault. The Calhoun County prosecutor and circuit court failed to either re-try Heyerman or drop charges against him. Meanwhile, the Parole Board denied him release three times after he had served his minimum sentence.

Heyerman would still be in an Upper Peninsula prison if another inmate, a jailhouse lawyer, hadn't helped him write a writ to get a new trial. Two weeks ago, a Calhoun County judge finally dropped all the charges against the 54-year-old former janitor. "

Heyerman plans to sue his original attorney and to file a civil suit against the state for wrongful imprisonment. This mess is likely to cost taxpayers more than they paid to keep Heyerman locked up.

Here, Hinshaw reports a NJ attorney who lost legal malpractice coverage for failure to report.  Court found that it should have known, subjectively that notice to the insurer was due.  NY has similar cases, for example, Cass v. American Guarantee in which the law firm should have given notice.  As determined by Justice Tolub , any reasonable attorney would have known that a malpractice case was on the way, after the worker compensation case was dismised.

Here is a divorce legal malpractice legal fee case from the upper reaches of NJ society, complete with client meetings at the country club, promises to pay for the divorces of others, vindictive hiring of attorneys...you name it.

By way of background, on August 18, 1997, defendant retained plaintiff to represent him in a contentious divorce action already underway and involving substantial marital assets. At the time, defendant and his wife were separated and defendant was residing with Moran and her children, one of whom was the daughter of John Izmirlian, from whom Moran had already been divorced.

Defendant's own matrimonial dispute was scheduled for trial on May 19, 1998, less than nine months after plaintiff was retained. Rather than proceed to trial, defendant and his former wife elected to engage in settlement negotiations and after two days, on May 21, 1998, reached an agreement. A final judgment of divorce was entered the next day, May 22nd, after a hearing in which the terms of the property settlement agreement (PSA) were placed on the record and the parties testified they entered into it knowingly, freely and competently.

Defendant also appeals from an October 28, 2005 order of final judgment holding him liable for fees and costs incurred by plaintiff on behalf of Moran. The genesis of that matter was in late January-early February, 1999 when, during the course of his own post-divorce litigation, defendant arranged a meeting with plaintiff and Moran to discuss plaintiff's representation of Moran in a post-divorce action initiated by Moran's former husband Izmirlian. Earlier, defendant had conveyed to plaintiff his opinions that Izmirlian was dishonest, concealing his income from both the Internal Revenue Service and Moran, and that he should be made to pay all the child support for the daughter then living with defendant and Moran. By all accounts, that meeting was held at a local country club and thereafter, on February 5, 1999, plaintiff and Moran signed a retainer agreement.

According to plaintiff, the meeting lasted two hours during which they talked almost exclusively about Moran's legal situation. Defendant once again mentioned that Izmirlian was attempting to hide his finances and that he wanted to ensure Izmirlian paid his support obligations. Moran said she was unable to pay for plaintiff's services and plaintiff herself knew that Moran had no steady means of supporting herself, that Izmirlian had no money, and that Moran had previously discharged a fee obligation of approximately $15,000 in bankruptcy proceedings. Consequently, plaintiff raised the issue of payment, asserting that litigation would be expensive and that she could not proceed without payment. According to plaintiff, defendant assured her that he was "willing to throw some money at this, so that that little prick pays to support his kid." With that assurance, plaintiff entered into a retainer agreement, and commenced preliminary work on the case, including arranging a meeting between the parties, which turned out to be unproductive.

The following day, May 23rd, defendant, apparently concerned for his former wife, agreed to renegotiate the PSA, however, these negotiations eventually proved unavailing. As a result, defendant's former wife moved to set aside the PSA and a twenty-two day plenary hearing ensued in which she claimed she was under duress at the time. At the conclusion of the evidence, Judge Cass denied the application to set aside the PSA, finding it was fair and reasonable and not the product of duress or incompetence. "  Read the rest!

Anthony Lin reports in the NYLJ that Sidley Austin has avoided prosecution for tax shelter manipulation, even though one of its "expelled" attorneys is facing felony charges.  SA will pay $ 39 milliion in fines.

"Federal prosecutors have decided not to bring criminal charges against Chicago law firm Sidley Austin over its involvement with illegal tax shelters, though the law firm will pay a civil penalty of $39.4 million to the Internal Revenue Service.

In announcing the decision yesterday, U.S. Attorney Michael J. Garcia of the Southern District of New York distinguished the actions of the firm from that of former tax partner Raymond J. Ruble, who is already facing a criminal trial in Manhattan federal court.

Mr. Ruble, who was expelled from Sidley Austin in 2003, and several former employees of accounting firm KPMG are charged with creating and promoting tax shelters banned by the IRS, with Mr. Ruble also issuing hundreds of opinion letters meant to provide legal cover for the shelters. The IRS estimates 700 wealthy individuals and corporations relied on Sidley Austin opinions in purchasing illegal tax shelters.

In deciding not to prosecute the law firm, Mr. Garcia said his office took into account the fact that most of Mr. Ruble's activities took place when he was a partner at New York's Brown & Wood, with which the firm then known as Sidley & Austin merged in 2001. The former Sidley & Austin had never had a tax shelter practice and took steps at the time of the merger to rein in Mr. Ruble's practice. Mr. Garcia said Mr. Ruble continued his practice only by misleading his partners at the merged firm. "

Here is a very interesting case from the 2d Department.  It involves one of the best and most known medical malpractice practitioners, who has more multi-million dollar verdicts and settlements than most of us have even read about.  This case teaches three lessons.

The first is that an infant's compromise, a wrongful death compromise or other judicially decided award of legal fees virtually kills any legal malpractice claim.

The second is that it is probably always better to communicate with your clients over settlement demands in writing.  Here there was an offer of $ 1 million to settle, which was turned down, ending in a verdict of $ 350,000.  Client admitted, kind of, that she knew of offer, perhaps...but called it a "settlement value" rather than an offer.

Third lesson, well known to all, is don't ask a question without either knowing what answer will be given, or prepping the witness with an appropriate answer.  Here, plaintiff's attorney asked what would have happened if the $1 million had been offered, and the client waffled.

Result?  Legal malpractice dismissed.

What an International Cast!  "Southern District of New York Judge Lewis Kaplan dismissed civil racketeering charges seeking millions in damages against Faith Zaman and Thomas William Derbyshire by the younger brother of the Sultan of Brunei -- Duli Yang Teramat Mulia Paduka Seri Pengiran Digadong Sahibul Mal Pengiran Muda Haji Jefri Bolkiah, otherwise known as Prince Jefri -- and companies he controls. Alleged frauds committed by an English husband-and-wife legal team were not enough to support a prince's claim that his former advisers were engaged in a racketeering enterprise, a federal judge has ruled.

Prince Jefri had hired the barristers to serve as "principal legal advisors, strategists and confidantes" from May 2004 to November 2006.

But he claimed they abused his trust by selling a piece of the prince's property in a "sham transaction" to an entity they owned, used his money to buy property for one of their own companies, faked documents to overstate Zaman's compensation and hired her brother for an unnecessary job at New York's Palace Hotel, which was owned by one of Prince Jefri's companies.

Here a tax preparer was sued for not telling an "innocent spouse" about the danger of filing a joint return, when she could have filed an individual return and avoided a startling amount of liability.  After bankruptcy, wife sued and lost.

"Shortly before Ted’s death, Camille discovered that Ted had failed to pay the taxes. When attempting to sell the marital home, Camille learned that tax liens had been placed on the property to secure Ted’s business liability for federal withholding tax, interest and penalties. Camille ultimately fi led for bankruptcy and settled the federal and state tax liabilities. Camille then sued Crincoli and his fi rm for accounting malpractice, asserting that he had failed to advise her that, by fi ling a joint tax return, she could be exposed to personal liability for taxes, interest and penalties relating to her husband’s business – liabilities that she would not have borne had she fi led separately.

At trial, Camille’s accounting expert testifi ed that Crincoli had deviated from accepted accounting practices by failing to explain the risks of fi ling a joint return to both spouses. The expert conceded, however, that these “accepted practices” did not derive from standards set by the AICPA or the IRS, but rather were based upon his “personal” standards. In contrast, Crincoli’s expert testifi ed that Crincoli had acted properly and should not have been expected to investigate the accuracy of the information provided by the husband or to discover that the marital home was held in the wife’s name. The expert testifi ed further that it was not uncommon for one spouse to act as the agent for the other in communicating with a tax preparer.

After a four-day trial, the trial judge dismissed the complaint and entered judgment in the amount of $6,000 (the outstanding accounting fees) in favor of Crincoli. On appeal, the Appellate Division affi rmed the lower court’s ruling. The appeals court agreed with the trial court’s ruling that Camille’s expert was not credible, and that the standard of care set forth by Crincoli’s expert should govern. The appeals court also noted, that even if Crincoli had been negligent, that his negligence was not the proximate cause of Camille’s damages; she did not present any evidence that, had she been informed of the risks of fi ling jointly, she would have acted differently.

While both the trial and appeals courts ultimately sided with the tax preparer in Daunno, accountants and tax preparers should consider providing a standard written disclosure to their clients making clear that they are relying on the information supplied to them by the clients themselves and that they are undertaking no duty to conduct an independent investigation to confi rm the accuracy or completeness of that information. "

Dismissal under CPLR 3216, for a failure to provide discovery, or to follow a court order of discovery has been generally thought to preclude the use of CPLR 205.  CPLR 205 is a "saving statute"  which allows plaintiff to start a second action within 6 months of the dismissal of the first, so long as it was not for certain reasons.  Here, in this case:

"CPLR 205(a) provides that

"[i]f an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period."
While dismissal of an action for failure to comply with discovery orders has been held to be a dismissal for neglect to prosecute the action' within the meaning of CPLR 205(a) (see Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape Architects, P.C. [Habiterra Assoc.], 5 NY3d 514, 518), here, the plaintiffs' conduct did not rise to that level. "

There is a saying that bad cases make bad law.  We've always understood that proverb to mean that poorly argued or conceptualized cases affect the entire field of law.  Here is an example of the situation.  Pro-se defendant attorney in a legal malpractice case was served directly in hand by the attorney for plaintiff.  Why the attorney did not use a process server is beyond us.  Nevertheless, this appellate division case is now law, and must be digested.

"The advocate-witness disqualification rules contained in the Code of Professional Responsibility provide guidance, not binding authority, for courts in determining whether a party's [counsel], at its adversary's instance, should be disqualified during litigation" (S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 69 NY2d 437, 440). At bar, the hearing court providently exercised its discretion in permitting the plaintiffs' counsel to testify at a hearing that he personally delivered the summons and complaint, by hand, to the defendant Ronald J. Chisena. Where, as here, there is no necessity for the plaintiffs' counsel to be called as a witness at trial, no violation of the advocate-witness rule exists (see Code of Professional Responsibility DR 5-102[c][22 NYCRR 1200.21(c)]; S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., supra at 443). "

Attorney Malpractice is a litigation form with many highly sophisticated rules.  Attorneys make up the rules of attorney litigation.  Legal malpractice is subject to very stern analysis by judges.  Here is an article from Texas which sets forth rules on specificity there.

"In a further illustration of the need to avoid conclusory affidavits in summary judgment proceedings, a legal malpractice claim foundered when an affidavit concerning damages was found to be conclusory in United Genesis Corp. v. Brown, No. 04-06-00355-CV, 2007 WL 1345372 (Tex. App.—San Antonio May 9, 2007). "

Roger D. Blackwell is a former marketing professor in college, who did very well for himself.  However, he was convicted of insider trading when a "federal jury in Columbus found that Blackwell, a member of Worthington Foods Inc.'s board of directors, illegally tipped off friends and relatives in 1999 to Kellogg Co.'s secret pending purchase of Worthington Foods, and then covered it up"  Now, in this story, a " Minnesota insurer wants former marketing professor Roger D. Blackwell to return $2.6 million the company gave him to help pay for his legal defense against federal insider-trading charges."

What is even more astounding is that he paid $6 million to his criminal defense attorneys.  How does a professor even contemplate such a big fee?  Better yet, the law firm is now suing him for an additional $ 2.7 million which they say he owes! "The former consumer-behavior professor said in a legal malpractice suit filed last year that he paid nearly $6 million to his previous trial attorney, Thomas O. Gorman, and law firm Porter, Wright, Morris & Arthur.

Blackwell said Gorman and Porter, Wright, based in Columbus, misled him about his defense, did a poor job handling his criminal trial and charged him excessive fees.

Gorman and Porter, Wright denied Blackwell's claims and countersued for more than $2.7 million in allegedly unpaid fees and expenses.

After Blackwell was convicted, he hired attorney William Wilkinson and law firm Thompson Hine for the appeals process, which was unsuccessful.

In addition to Blackwell's six-year sentence, he was fined $1 million by U.S. District Judge James L. Graham. Blackwell also faces a potential $1 million judgment in a civil insider-trading complaint filed against him by the U.S. Securities and Exchange Commission.

It bills itself as "The Oldest Law Journal in the United States", and reports today on this legal malpractice dismissal in Pennsylvania.  Here, in an estate/inheritance legal malpractice, the case was dismissed on motion, and the appeal ran afoul of a Penn statute against vagueness.  What follows is a discussion of the statute:

"A Superior Court panel has affirmed the dismissal of a legal malpractice action brought against Fox Rothschild by two brothers who claimed the firm’s handling of a family will left their inheritance lighter than it should have been.

However, the appellate judges in Hess v. Fox Rothschild ruled that Philadelphia Common Pleas Judge Annette M. Rizzo had been wrong to reject the brothers’ appeal as too vaguely worded.

The case sheds light on a rare theme of the ongoing Rule 1925(b) saga.

Typically, state court judges have used that appellate procedural rule to bounce an appeal if the appellate statement was too long and/or raised too many issues."

But the rule also directed attorneys not to make their statements overly vague, and a number of appeals were quashed under that provision of the rule.

When the justices approved amendments to Rule 1925 earlier this month, they prospectively precluded judges from nixing an appeal solely because of the number of issues raised. That measure was likely in response to practitioners’ gripes that appeals in complex or high-stakes cases might necessarily involve dozens of issues.

But the high court also added new language to the rule that will permit civil litigation appellants to attach to their 1925(b) statements a preface explaining why the statement has been phrased in general terms if don't believe they can "readily discern the basis" for trial judges’ decisions.

In a NYLJ article today [subscription], Professor Patrick Connors discusses letters of retention and litigation.

He writes:

"In this installment, we will take a few steps back to the inception of the representation and discuss a rule that affects the substantive rights of lawyers vis-à-vis their clients. ""Conclusion

Until the Court of Appeals finally speaks to the matter, we recommend that the bar satisfy the requirements of Part 1215 and observe the resolution of these issues from afar."

While many think of trial law as a form of gambling, here is the real thing.  Keno operator wants to break up a partnership and open his own gambling shop.  Hires attorneys to do the transactional work, and gets bad advice.  He wins  $1.6 million, which is reduced to $229,000.

"The Nebraska Supreme Court soon will hear a two-sided appeal in a legal malpractice case involving a keno operator and the state's second-largest law firm.

Richard T. Bellino wants the court to reinstate a jury verdict awarding him $1.6 million but District Judge Patricia Lamberty ruled that the trial evidence did not justify that amount and ordered McGrath, North, Mullin & Kratz to pay Bellino $229,000.

In a brief to the court, Bellino's attorneys, David Domina and Claudia Stringfield wrote, "A jury verdict should be jealously guarded and maintained by our courts, and Nebraska law does not permit a district court to crown its view by underwriting a conclusion rightfully reached and supported by evidence, but not agreed to by the district court."

The law firm wants the high court to dismiss the case entirely. "

In a brief for the firm, attorneys John Douglas and David Blagg wrote, "An attorney who acts in good faith and with an honest belief that his or her actions are well founded in the law and in the best interest of his client, is not liable for malpractice even if he is mistaken."

Douglas and Blagg wrote that the trial court should have ruled that Bellino's attorneys caused him no damages. "

Hinshaw reports this case:

"J. Michael Koehler v. Jules Brody, et al., ___F.3d___, 2007 WL 895864 (8th Cir. 2007)

Brief Summary
Two years after a court approved a class action settlement, a lead plaintiff brought suit against former class counsel for breach of fiduciary duty and misrepresentation, claiming that the settlement was too low and that it should have been paid in stock to avoid adverse tax consequences. The appellate court affirmed the dismissal of these claims on the ground that the plaintiff was collaterally estopped from suing class counsel to attack the class recovery.

Complete Summary
This case arose out of a global settlement of a number of class action cases related to the merger of NationsBank and BankAmerica into Bank of America. J. Michael Koehler was a lead plaintiff and class representative. The court appointed the firms of Green, Schaaf & Jacobsen, P.C., Chitwood & Harley, and Stull, Stull & Brody as co-lead counsel. A mediation was held in January 2002 under the direction of a former federal district judge. Mr. Koehler and some other lead plaintiffs were present at negotiations but left after two days. The mediation continued and resulted in a $490 million settlement. The court looked at two other similar cases in which plaintiffs were collaterally estopped from suing representatives because implicit in the lower court’s approval of the settlement was a finding that the class had been adequately represented. See Laskey v. UAW, 638 F.2d 954 (6th Cir. 1981) and Thomas v. Powell, 247 F.3d 260 (D.C. Cir. 2001). Mr. Koehler could not establish injury without relitigating an issue already decided by the class action court. The same rule applied whether the allegations were of malpractice or breach of fiduciary duty and related claims of aiding and abetting a conspiracy. Although Mr. Koehler tried to allege newly discovered evidence to get a “second bite of the apple,” the court noted the issue is not whether the district court was aware of every fact alleged when it approved settlement, but whether the earlier judgment prohibits Mr. Koehler from litigating his claim that the alleged misconduct was the proximate cause of injury to him. Id. at *7.

The court concluded that Mr. Koehler was effectively trying to renew his old arguments that the settlement was too low. When the district court approved the settlement over Mr. Koehler’s objections and awarded attorney fees, it determined the attorneys had provided “more than adequate representation and that the very favorable settlement was ‘fair, reasonable and adequate.’” Id at *7. Mr. Koehler could not establish a breach of duty and a causal injury without relitigating an issue already decided, and therefore the dismissal was affirmed.

Significance of Case
This decision affords class counsel some protection against plaintiffs with “buyer’s remorse” who may try to sue counsel for malpractice or breach of fiduciary duty to get another chance to reopen the issue of the settlement amount. "

Lory v. Parsoff,  296 A.D.2d 535; 745 N.Y.S.2d 218; 2002 N.Y. App. Div. LEXIS 7584 
illustrates the danger of wrongly filing a security documents, such as a UCC1.  Of course, purchaser defaulted, and lender lost all.  In the legal malpractice case, attorney lost its fee paid to date, the cost of trying to fix the case, as well as the value of the secured interest.  In a later appeal, fees paid to the bankruptcy attorney were disallowed.

"An attorney's failure to file a UCC financing statement in the manner necessary to perfect his client's security interest constitutes malpractice as a matter of law (see Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617; Deb-Jo Constr. v Westphal, 210 AD2d 951). Furthermore, the Supreme Court properly granted summary judgment on [***3] the cause of action to recover an award of an attorney's fee expended to retain alternative counsel as a result of the defendants' malpractice (see Affiliated Credit Adjustors v Carlucci & Legum, 139 AD2d 611). Additionally, there is no merit to the defendants' challenge to the plaintiff's claim for a refund of the legal fee paid to them in connection with the negligent representation (see Campagnola v Mulholland, Minion & Roe, 76 NY2d 38)."

Law.Com reports that 2 Florida attorneys were disciplined for settling a big big case, and then agreeing to be paid not to take more cases.

"The Florida Supreme Court disbarred one plaintiffs lawyer and handed another a two-year suspension for taking a $6.4 million fee from the defense to file no more cases against E.I. du Pont de Nemours & Co.

Roland R. St. Louis Jr. and Francisco R. Rodriguez of the defunct Miami firm of Friedman, Rodriguez, Ferraro & St. Louis had represented 20 clients suing DuPont for damages allegedly resulting from exposure to Benlate, a fungicide suspected of causing severe crop damage and withdrawn from the market in March 1991.

St. Louis, "the main strategist in the case," had DuPont in a difficult position. The trial court orally accepted a 110-page motion for sanctions for discovery abuse in the lead case, telling DuPont that it intended to sanction the company by striking its pleadings. The court encouraged it to settle the case, according to the high court's opinion. Davis Tree Farms Inc. v. E.I. DuPont Nemours & Co., No. 1992-20006-CA-01 (Miami-Dade Co., Fla., Cir. Ct.).

DuPont eventually agreed to pay the plaintiffs $59 million if they would get the trial judge's order vacated and sealed without publicity, settle 18 cases contingent upon the settlement of two key cases, and keep the settlement figures confidential, the opinion said.

At the same time, St. Louis and Rodriguez also agreed to a secret side deal by which the firm would receive a separate $6,445,000 fee from DuPont to refrain from further Benlate litigation against the company and to serve as counsel and/or consultants for the company in future matters, the high court said.

For the professional conduct rules violated in taking this fee, the state Supreme Court disbarred St. Louis and ordered him to disgorge $2,277,663, his share of the fee DuPont paid the firm. The Florida Bar v. St. Louis, No. SC04-49. Rodriguez received a two-year suspension, with a fee yet to be determined. Rodriguez could be ordered to pay as much as $1.4 million to the state bar's Clients' Security Fund. The Florida Bar v. Rodriguez, No. SC03-909. "

We reported on this case yesterday.  An ill known US Bankruptcy provision allows a 2 year period in which to bring an otherwise timely action, once the cause of action becomes an asset the estate in bankruptcy,

Victoria Kremen, who underwent unnecessary mastectory, should have had the benefit of "section 108 of the Bankruptcy Code provides in relevant part that: "[i]f applicable nonbankruptcy law . . . fixes a period within which the debtor may commence an action, and such period has not expired before the date of the [debtor's] filing of the [bankruptcy] petition, the trustee may commence such action only before . . . two years after the order of relief." 11 USC §108 (a) (2). In turn, section 301 of the Bankruptcy Code provides that "the commencement of a voluntary case under a chapter of this title constitutes an order for relief under such chapter." 11 USC §301 (b). "

Her medical malpractice and appellate attorneys completely missed this winning argument against dismissal and are now legal malpractice defendants.  Here is the case.

A bill just passed out of committee in the NY State Senate, sponsored by the Court System [OCA] would amend CPLR 2001 to permit courts to forgive errors in the starting of law suits.  One example is a well-known mistake of purchasing an index number for a motion seeking leave to file a late notice of claim, receiving permission, and then using the same index number to start the case.

Joel Stashenko, in the NYLJ reports:

"The failure to properly acquire an index number or other similar procedural error attorneys make when filing an action, sometimes with fatal consequences to their cases, could be disregarded under legislation that has reached the floor of the state Senate.

Sponsors said the measure was prompted by a series of Court of Appeals rulings holding that such errors can result in outright dismissal of suits, provided that a timely objection is made to the defective filings. In one of the most recent rulings, in Matter of Harris v. Niagara Falls Bd. of Education, 6 N.Y.3d 155 (2006), the Court dismissed an action because the plaintiff filed the summons and complaint under the same index number that was used to make a motion to serve a late notice of claim and failed to pay another index fee.

The legislation stems from a proposal made by the Advisory Committee on Civil Practice at the Office of Court Administration. The Senate sponsor of the bill, Codes Committee Chairman Dale Volker, said the bill was introduced at the request of Chief Administrative Judge Jonathan Lippman.

The legislation, S3563, would amend §2001 of the Civil Practice Law and Rules to specify that "the failure to purchase or acquire an index number or other mistake in the filing process" that does not prejudice either party in the action "shall be disregarded" by the court. If a mistaken non-payment of a fee is involved, the legislation calls for the applicable fees to be paid and the non-prejudicial error to be ignored.

The bill would apply to the "filing of a summons with notice, summons and complaint or petition to commence an action."

Mr. Volker said yesterday the measure clarifies what he called uncertainty about how serious errors made in the initial filing of civil actions are in light of the finding in Harris and other court rulings, and also the discretion judges have under CPLR §2001 to allow for their correction.

"It gives the court discretion to correct or ignore mistakes that don't go to the heart of the cases," Mr. Volker, R-Hamburg, said.

The bill cleared Mr. Volker's committee on Tuesday."

At first blush, one assumes a loss of attorney-client privilege in legal malpractice, or in this case, an indeminfication case for legal costs.  The sued party would like to explore how the case was settled, whether settlement was reasonable, and why they should have to pay a settlement in which they did not participated.  Part of defending this case will be dissecting the attorney's performance.

"A party suing to enforce purported indemnification rights for the costs of a prior lawsuit does not automatically waive its attorney-client privilege for communications from the prior action, an appellate panel has held.

"So far as the record for this appeal discloses, plaintiff, in commencing and prosecuting this action, has done nothing to waive the protection of the attorney-client privilege or the work-product doctrine as to materials concerning the defense and settlement of the prior lawsuit for which indemnity is sought," Justice David Friedman (See Profile) wrote for the unanimous Appellate Division, First Department, panel in Deutsche Bank Trust Company of Americas v. Tri-Links Investment Trust, 8893N. "

A Rochester Law firm sent a letter to a Connecticut artist, and ended up in SDNY over the Fair Debt Collection Practices Act.  Right now, the case stays in the SDNY and will not be moved to Western District, wherein Rochester lies.

"PLAINTIFF CONNECTICUT resident's lawsuit alleged that defendant Rochester, New York-based law firm was a "debt collector" as defined by the Fair Debt Collection Practices Act (FDCPA) and that its April 4, 2006 letter, mailed to her New York city art studio, violated the FDCPA. After considering the factors in D.H. Blair & Co. Inc. v. Gottdiener, the court denied the law firm's motion to transfer plaintiff's suit - seeking actual and statutory damages, costs, and attorney's fees - to the Western District of New York. Noting that plaintiff brought suit in the district to which defendant sent - and plaintiff received - the letter, the court deemed plaintiff's forum choice entitled to deference. In concluding that the parties' convenience also called for retention of plaintiff's action in the Southern District of New York, the court noted that plaintiff regularly travels to the district in order to paint in her studio, and that the law firm had not shown that travel from Rochester to defend the action would impose a significant hardship. "

Hinshaw reports:

"California Court Finds No Duty Owed to Reinsurer by Defense Attorney Who Was Hired by the Primary Carrier

May 15, 2007

Zenith Insurance Company v. Cozen O’Connor, ___Cal.Rptr.3d___, 2007 WL 841119 (Cal.App. 2 Dist. 2007)

Brief Summary
The California Court of Appeal for the Second District affirmed the dismissal of a legal malpractice claim brought by a reinsurer against a law firm hired by the primary carrier to represent the insured. The court held that the firm owed no duty of care to the reinsurer because no attorney-client relationship existed under an implied contract, nor was the reinsurer a third party beneficiary of the underlying attorney-client relationship.

Complete Summary
Royal Insurance Company (“Royal”), the primary carrier, had entered into a reinsurance agreement with Zenith Insurance Company (“Zenith”) for coverage provided by Royal to Foss Maritime (“Foss”) regarding liability for the environmental cleanup of the Middle Waterway of Commencement Bay in Tacoma, Wash. (the “Middle Waterway claim”). Royal advised Zenith that there were 22 other insurers potentially liable for the same claim. Royal engaged the Cozen O’Connor firm to provide legal services to Royal regarding this claim, as well as other Foss pollution claims in the State of Washington. "

All right, the attorney did not "bark like a dog".  His behavior was bad enough for the judge to boot him out of West Virginia [or revoke his admissions pro haec vice]  Here is the story.:

"WINFIELD - Putnam Circuit Judge Ed Eagloski chased a Texas lawyer back to the Lone Star State for misbehaving in a deposition.

At a hearing May 11, Eagloski vacated an order allowing Kevin Oncken of San Antonio to defend Putnam General Hospital in malpractice suits.

"He was degrading, demeaning and completely unprofessional," said Eagloski, who had seen tape of Oncken deposing a plaintiff.

Eagloski said Oncken told Charleston attorney Richard Lindsay that if he wanted to talk to him, he should put on lifts. Oncken stands about 10 inches taller than Lindsay.

Eagloski said he would refer Oncken to the West Virginia Bar, and he said he would send the tape to the Bar. He also said he could also take privileges away from Oncken's partner, Jeffrey Uzick.

"But I think he will take the warning of this court appropriately," Eagloski said. "Will you do that, sir?"

"Yes sir," Uzick said. "

Here, law firm disqualified because it represented plaintiff and defendant at the same time in different cases.  Lawfirm's response, No, its OK!!

"HRH Construction LLC v. Palazzo, 600857/06
Decided: May 4, 2007

Moreover, although multiple representation may be permissible where, after full disclosure of the risks of such representation, the attorney has obtained the consent of both parties, here there is no indication that disclosure was made and consent obtained. Although HRH may well have been sloppy about keeping track of the attorneys that represented the company in different cases, a client has no fiduciary duty to be vigilant about the identity of its attorneys. In contrast, given the mandates of DR 5-105 and DR 9-101, attorneys have a responsibility to "'avoid not only the fact, but even the appearance, of representing conflicting interests'" (Cinema 5 Ltd. v. Cinerama, Inc., 528 F2d at 1387 [citation omitted]), and to insure that they have not undertaken simultaneous representation without disclosing the existence of that representation and obtaining consent of both clients. Unfortunately, counsel for defendants have failed to do so here.

Accordingly, it is hereby

ORDERED that plaintiff's motion to disqualify is granted. "

This is a sad case of willful ignorance, passive-aggressive client behavior, and a refusal to acknowledge reality. Its a car accident turned legal malpractice case.  Unusually, it is the defendant - client who is suing his insurance defense attorneys. 

Driver had a 15/30 policy [as small as possible] and really injured the other driver.  Insurance compnay put up its $ 15 and then over and over tried to warn plaintiff that his coverage was too small, and that he had to do something about the situation.  He did not, and although he probably could have added a simple $ 1000 per month for 5 months, ended up with a judgment of $ 150,000 which he has to pay through salary garnishment. 

Of interest are two discussions of the use of expert reports, here, of the attorney expert.  Note: the term net opinion.

"In our review of Nathan's two reports and Nathan's deposition, we find no citation to professional standards or customs as reflected in defense lawyers' journals or articles in support of his opinion that defendants committed legal malpractice. Additionally, Nathan references no judicial or statutory authority establishing the existence of a standard of care for defense attorneys, when the client's monetary exposure over the policy limits places the client in jeopardy of a substantial excess verdict. Instead, other than a recitation of Nathan's own personal opinion as to the standard of care based on his years of experience as a personal injury trial attorney, Nathan relies for his opinion on defense counsel's alleged breach of Rules of Professional Conduct (RPCs) 1.4 (communication), 1.3 (diligence), and 1.1 (gross negligence) as support for his opinion. In Baxt v. Liloia, 155 N.J. 190, 197 (1998), the Court concluded that a violation of the RPCs alone does not give rise to a cause of action for legal malpractice. The reason is that the disciplinary codes were not designed to establish standards for civil liability. Id. at 201; see also Barsotti v. Merced, 346 N.J. Super. 504 (App. Div. 2002).

We are convinced that Judge Stroumtsos in his comprehensive and well reasoned written opinion correctly determined Trivedi's legal malpractice expert's testimony was inadmissible because his testimony constituted a net opinion. See Townsend, supra, 186 N.J. at 494. The court found the expert's opinion was based on his personal beliefs and unsupported by any evidence demonstrating industry standards and customs. See Stoeckel, supra, 387 N.J. Super. at 14. The judge concluded that without an expert opinion establishing the standard of care required of a defense attorney in advising his/her client as to the client's potential personal exposure in the event of a damages verdict in excess of the liability insurance policy limits, Trivedi's claim for legal malpractice could not be proved and that defendants were entitled to judgment as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523-24 (1995)."

This is a car case in which verdict was $ 25,000 for loss of income, $ 20,000 for past pain and suffering and $ 0 for future pain and suffering.  Smelling a problem, plaintniff's attorney asked the court to interview jurors.  One of them was a physical therapist, and plaintiff wanted to show that the jurur used his personal knowledge to find against plaintiff.

Plaintiff gets new trial, but now, loses all loss of income claims because basid non-economic loss not recoverable.  Victory or defeat ?

From this weeks advance sheets:

"Although plaintiff denominated the motion denied by the May 2006 order as one to vacate a default, the dismissal order was not rendered on default within the meaning of CPLR 5015(a)(1), since plaintiff had appeared in opposition to the motions and cross motions to dismiss. Given that plaintiff's motion to vacate was based on evidence that had not previously been submitted to the IAS court, we exercise our discretion, in the interest of justice, to deem that motion to have sought renewal of the dismissal order pursuant to CPLR 2221(e) (see Tishman Constr. Corp. of New York v City of New York, 280 AD2d 374, 376-377 [2001]), and, upon review, we find that the new evidence warranted reinstatement of the complaint. That evidence, including the affirmation of a psychiatrist and the affidavit of a licensed clinical social worker, establishes that plaintiff's former attorney failed to comply with the October 31, 2005 discovery deadline due to panic and anxiety attacks he was suffering as the result of a diagnosed mental illness, combined with other difficulties in functioning caused by a change in the dosage of his psychiatric medication. Since it is undisputed that plaintiff has now provided all required disclosure, and there has been no showing that reinstatement of the complaint will cause any cognizable prejudice to defendants, we decline to impose on plaintiff the drastic penalty of dismissal of the complaint as a sanction for the non-volitional failures of its former attorney related to his mental illness (see Jiminez v St. John's Riverside Hosp., 161 AD2d 497 [1990]). "

"Settlement" was binding after attorney agreed to settle case in court, with City of NY.  The evidence?  Not a transcript, not the client in open court; it was a marking on the "court card" of "settled" made by the clerk. 

This is an expansion of the "settlement in open court" doctrine, which holds that there must be either a writing or an acknowledgement of settlement in open court, on the record.  Here plaintiff wanted to try the case, but was bound by her attorney's apparent although exceeded authority.

"Plaintiff implicitly ratified the settlement by making no formal objection for nearly seven months after being told about it (Clark v Bristol-Myers Squibb & Co., 306 AD2d 82, 85 [2003]). Furthermore, the requirements of CPLR 2104 were met when, following the conference and counsel's acceptance of the settlement, the court clerk updated the court card to read "settled before trial" and marked the case "disposed" in the court's records (Popovic v New York City Health & Hosps. Corp., 180 AD2d 493 [1992]). "

Victoria Kremen suffered unnecessary bilateral mastectomomy, and then legal malpractice, and then bankruptcy, Law.com reports:

"A New York state judge has permitted a legal malpractice suit to proceed against plaintiffs lawyers who allegedly failed to seek a bankruptcy extension for their client, causing her medical malpractice case to be thrown out as untimely.

The article does not make this clear:  why legal malpractice?  A medical malpractice case was brought 1 month after retaining Benedict Morelli's law firm, and took place during/around the bankruptcy.  Is the legal malpractice for allowing the case to be dismissed?

In denying a motion to dismiss the action against law firms Morelli Ratner and Schapiro & Reich, Manhattan Supreme Court Justice Emily Jane Goodman said a combination of equitable estoppel and the U.S. Bankruptcy Code's tolling of statutes of limitations might have saved the underlying lawsuit, even though the medical malpractice at issue took place over a decade ago. "

"The statute of limitations for medical malpractice cases in New York is 2 1/2 years following the malpractice. The trial court dismissed the suit as untimely and rejected the plaintiff's argument that the misdiagnosis had been fraudulently concealed from her. The Appellate Division, 1st Department, upheld the ruling in 2005, finding that Kremen's 25-month delay in bringing an action even after learning of the alleged malpractice in 1999 was "unreasonable as a matter of law."

But Justice Goodman, in Kremen v. Morelli & Associates, 101739/06, said the delay may not have been unreasonable in light of §108 (a) of the Bankruptcy Code, which grants debtors an additional two years to file claims that "applicable nonbankruptcy" laws would otherwise require them to file in the midst of bankruptcy.

The judge said New York's laws on the tolling of statute of limitations law constituted the type of non-bankruptcy law contemplated in the Bankruptcy Code. "

We'll report the case when it is published.

This Appellate Division Case points up how the court  treats just one too many mistakes.  Default, followed by failure to oppose a motion followed by....  The court uses the phrase "pattern of willful default.

"To vacate the order dated February 18, 2005, entered upon the plaintiffs' default in opposing the appellants' motion pursuant to CPLR 3042 and 3126 to dismiss the complaint insofar as asserted against them, the plaintiffs were required to demonstrate both a reasonable excuse for their default and a meritorious cause of action (see CPLR 5015[a][1]; Watson v New York City Tr. Auth., 38 AD3d 532; Echevarria v Waters, 8 AD3d 330, 331). Although the Court may, in its [*2]discretion, accept law office failure as a reasonable excuse (see CPLR 2005; Putney v Pearlman, 203 AD2d 333), "'a pattern of willful default and neglect' should not be excused" (Roussodimou v Zafiriadis, 238 AD2d 568, 569, quoting Gannon v Johnson Scale Co., 189 AD2d 1052). Here, the plaintiffs' attorney's failure to respond to the demand for a bill of particulars, to timely comply with the preliminary conference order dated September 14, 2004, and to oppose the appellants' motion to dismiss the complaint, and his further one-year delay in moving to vacate the order dated February 18, 2005, constituted a pattern of willful default and neglect that cannot be excused (see Diamond v Vitucci, 36 AD3d 650; Amato v Fast Repair, Inc., 15 AD3d 429, 430; Santiago v New York City Health & Hosps. Corp., 10 AD3d 393, 394). Under these circumstances, the Supreme Court improvidently exercised its discretion in granting the plaintiffs' motion to vacate the order dated February 18, 2005, entered upon their default. "

In a recent successful case, plaintiff was a large real estate management company. Plaintiff was involved in a 500 million dollar financing involving 3 NYC downtown buildings. The general counsel asked one of the multiple large firms whether "mortgage spreading" could be used to avoid payment of new mortgage tax. When told "no", the financing continued to closing. At closing it was determined that $1.7 million in mortgage tax could have been legally avoided, contrary to the advice. Prior to jury selection this case settled for $ 900,000.

Attorney malpractice arises in matrimonial settings too. In another recent successful case, Plaintiff -wife had a history of suicide attempts, which were one of the bases of husband's claim of cruel and inhuman treatment. Plaintiff had a history of psychiatric hospitalizations. Days after her release, her attorney and she attended a court hearing on custody, which turned into a settlement of the entire divorce. At the time, she was still on psychotropic medication, and only days out of the in-patient hospitalization. This attorney malpractice matter was settled for $350,000.

Attorney malpractice case arise in unexpected circumstances and may be more vital and valuable than expected. Analysis of the four elements of attorney malpractice is required to determine whether a case exists, and may successfully be prosecuted. As always, the elements are: professional relationship, deviation, proximate cause [including the "but for" element,] and damages.

In this NJ case, [which the NJLJ calls "Bad Bedside Manner"], client has car accident. We'll call him driver 1.  Relative of driver 2 comes to hospital room and gets hired as attorney,  He doesn't tell driver 1 that he is related to Driver 2.

Here is the rest of the case.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1862-05T21862-05T2
MIGUEL HERRERA, Plaintiff-Appellant,
v.
JEFFREY HARK, ESQUIRE,
and HARK & HARK, P.C.,

"These are the salient facts. On or about March 1, 2002, Herrera was the operator of a motor vehicle involved in a collision with a vehicle owned and operated by Vernon Roth, the grandfather of Jeffrey Hark's wife. Herrera was injured and hospitalized. During Herrera's hospitalization, and without his authorization, Hark obtained access to Herrera's hospital room. Despite the fact that Herrera was in severe pain and under the influence of pain medication, Hark induced Herrera to sign a contingency fee agreement. Hark disclosed neither his conflict of interest nor that his conduct in soliciting to be retained under these circumstances was in violation of the Rules of Professional Conduct. RPC 7.3(b)(1); see In re Pajerowski, 156 N.J. 5, 515 (1998) (finding a violation to send runner to accident victims hospital rooms shortly after accident). "

"It is well-settled that a legal malpractice claim is a negligence action brought against an attorney. Kranz v. Tiger, 390 N.J. Super. 135, 147 (App. Div. 2007); Sommers v. McKinney, 287 N.J. Super. 1, 9 (App. Div. 1996). In order to establish legal malpractice, the plaintiff must demonstrate: 1) the existence of an attorney-client relationship creating a duty of care upon the attorney; 2) that the attorney breached the duty owed; 3) that the breach was the proximate cause of any damages sustained; and 4) that actual damages were incurred. Jerista v. Murray, 185 N.J. 175, 190-191 (2005); Conklin v. Hannoch Weisman, 145 N.J. 395, 416 (1996). The law imposes upon the attorney a standard of care to ensure adequate legal needs of the client. Lamb v. Barbour, 188 N.J. Super. 6, 12 (App. Div. 1982), certif. denied, 93 N.J. 297 (1983); Lovett v. Estate of Lovett, 250 N.J. Super. 79, 88 (Ch. Div. 1991). The claim is based on alleged negligence in the practice of law because the attorney did not comply with the requisite standard of care. McGrogan v. Till, 167 N.J. 414, 425 (2001); Carney v. Finn, 145 N.J. Super. 234, 236 (App. Div. 1976).

It is part of the claimant's burden to show that the attorney's negligence proximately caused damages. Davin, L.L.C. v. Daham, 329 N.J. Super. 54, 72 (App. Div. 2000); Lamb, supra, 188 N.J. Super. at 12. That is to say, the negligence of the lawyer must have been a substantial factor in bringing about the loss and in addition some harm must have been foreseeable. Conklin, supra, 145 N.J. at 418-22.

Usually, a legal malpractice trial follows the "trial within a trial" format because the claimant has to show what result would have been obtained, but for the attorney's negligence. Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 358, petition denied, 182 N.J. 151 (2004). At such a trial, "plaintiff has the burden of proving by a preponderance of the evidence that (1) he would have recovered a judgment in the action against the main defendant, (2) the amount of that judgment, and (3) the degree of collectability of such judgment." Garcia, supra, 179 N.J. at 358 (quoting Hoppe v. Ranzini, 158 N.J. Super. 158, 165 (App. Div. 1978)). The plaintiff's damages are the difference between the result sought and the actual result. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001); see Gautam v. De Luca, 215 N.J. Super. 388, 397, certif. denied, 109 N.J. 39 (1987) ("The measure of damages is ordinarily the amount that the client would have received but for his attorney's negligence.").

Here, Herrera has not shown how he would have obtained a better result than the $95,000 settlement, even if Hark had disclosed his conflict of interest. In short, no showing of damages has been made.

We are still concerned by the conduct alleged here; however, disciplinary code violations are not designed to establish standards for civil liability, but rather to provide standards of professional conduct for which lawyers are to be disciplined. Baxt v. Liloia, 155 N.J. 190, 200 (1998). Accordingly, a copy of this opinion will be sent to the Office of Attorney Ethics, for its review and further action if appropriate. "

Interview a represented client?  Wrong!  or perhaps Sometimes Wrong!  or perhaps something else.  Scott Greenfield writes about this evolving question today in his Simple Justice blog.  Making waves in criminal law, testing the limits.  The Tom Liotti story.

From today's NYLJ by Anthony Lin:  Attorney loses case on summary judgment, and tells client that he is not obliged to handle appeal.  Client, chemical company, hires Nathan Dershowitz to handle appeal, which he does.  At appellate level, case settles for $ 250,000. 

Client pays Dershowitz a contingent fee, and original attorney sues client for his contingent fee.  Client inpleads Dershowitz on theory that he did not ascertain whether first attorney was due fees.

Result:  Attorney 1 gets no fee, Legal mal against Dershowitz dismissed.

 "A federal judge in Manhattan has ruled against a lawyer seeking to collect a contingent fee on a case he lost at the trial level but which his client settled after filing an appeal.

Lawyer Barry I. Fredericks represented Chemipal Ltd. in a 2003 suit against weight-loss company Slim-Fast, whose products Chemipal distributed in Israel. Israeli-based Chemipal, which agreed to pay Fredericks $40,000 and a 35 percent contingent fee, claimed Slim-Fast violated its contract with it by not providing adequate marketing and advertising support.

But a federal court in Delaware granted summary judgment to Slim-Fast. Fredericks declined to handle the appeal and Chemipal hired Nathan Z. Dershowitz of Dershowitz, Eiger & Adelson. After the appeal was filed, Chemipal accepted a $250,000 settlement offer.

Fredericks sued Chemipal last year, arguing that his contingent fee arrangement with the company applied to the settlement. But Southern District of New York Judge Gerard E. Lynch granted summary judgment to Chemipal last week, finding that, though Fredericks' argument was plausible, New York law required an ambiguous retainer agreement to be read in favor of the client.

The agreement at issue specified the fees Fredericks would receive in the event of a successful result at the trial level. It also said Fredericks was not obligated to handle the appeal and his contingent fee would not be reduced by the costs necessary to defend a successful result on appeal. But the agreement was silent on the scenario that actually unfolded, with Chemipal losing at trial and recovering after its appeal.

Judge Lynch said Fredericks' argument that the agreement limited his responsibility to the trial level but not his fee was "perfectly reasonable" and the parties would have been free to contract as such. But the judge said the agreement also was open to other interpretations.

"Chemipal's argument that this was an unforeseen contingency, and that the agreement should be read as ending when the case was (temporarily) 'lost' is also not an impossible reading of the parties' intentions," the judge wrote in Fredericks v. Chemipal, Ltd., 06 Civ. 966."

Anthony Davis, writing in the New York Law Journal [subscription] writes of the recent appellate decision concerning the absence of an engagement letter:

"• Failing to Provide an Engagement Letter. In Rubenstein v. Ganea, No. 24483/04, 2007 N.Y. App. Div. LEXIS 4267 (2d Dept. April 3, 2007),  concerning an engagement letter as required by 22 NYCRR 1215.1.

The case presented two issues for determination: "First, . . . whether an attorney who fails to obtain a written retainer agreement or letter of engagement with a non-matrimonial client, in violation of 22 NYCRR 1215.1, may nevertheless recover the reasonable value of professional services rendered on a quantum meruit basis. Second, . . . whether an attorney who was awarded fees in a guardianship proceeding from the allegedly incapacitated person pursuant to Mental Hygiene Law §81.16(f) is barred by res judicata from recovering additional fees from the client who sought the appointment of the guardian."

In April 2002, the defendant, Cynthia Ganea (Ms. Ganea), retained the plaintiff, Seth Rubenstein PC (Mr. Rubenstein), to represent her in a proceeding for her appointment as guardian for her husband, Dinu Andre Ganea, under Mental Hygiene Law article 81. Terms were agreed upon that Mr. Rubenstein would be compensated at a rate of either $450 or $325 per hour, depending on the identity of the attorney performing the work, plus disbursements. The parties also agreed that Mr. Rubenstein's attorney's fees would be reduced by any amount awarded by the judge in the guardianship proceeding paid from the estate of the allegedly incapacitated person, Dinu Andre Ganea (the AIP). It was undisputed that no written retainer agreement or letter of engagement was prepared or executed, notwithstanding that several weeks earlier, 22 NYCRR 1215.1 had become effective.

Mr. Rubenstein then commenced an action on Ms. Ganea's behalf entitled In the Matter of the Application of Cynthea Ganea for the Appointment of a Guardian for Dinu Andre Ganea, an Alleged Incapacitated Person in Supreme Court, Kings County, (the Guardianship Proceeding). 22 NYCRR 1215.1 requires engagement letters explaining the scope of services, fees, billing practices, and the right to arbitration for any representation where the fees are likely to exceed $3,000.

In discussing the proper interpretation of 22 NYCRR 1215.1, the court points out that the provision

contains no express penalty for noncompliance . . . .Indeed, the intent of Rule 1215.1 was not to address abuses in the practice of law, but rather, to prevent misunderstandings about fees that were a frequent source of contention between attorneys and clients. This intent was described by Chief Administrative Judge Jonathan Lippman upon the rule's adoption, that 'this [rule] is not about attorney discipline in any way, shape or form, and we certainly do not expect in any significant degree there to be a large number of disciplinary matters coming out of this rule.' . . . The purpose of the rule therefore is to aid the administration of justice by prodding attorneys to memorialize the terms of their retainer agreements containing basic information regarding fees, billing, and dispute resolution which, in turn, minimizes potential conflicts and misunderstandings between the bar and clientele. (Citations omitted).

The court next explains why Rule 1215.1 should be distinguished from Rule 1400.3, the engagement letter rule that applies to matrimonial cases:

Whereas Rule 1215.1 was not intended to address abuses, Rule 1400.3 was specifically 'promulgated to address abuses in the practice of matrimonial law and to protect the public' . . . . The requirement that attorneys execute written retainer agreements with matrimonial clients is found not only in Rule 1400.3, but also in Code of Professional Responsibility DR 2-106(c)(2)(b), which forbids attorneys from 'collect[ing] . . . any fee in a domestic relations matter . . . unless a written retainer agreement is signed by the lawyer and client' (see 22 NYCRR 1200.11). Predictably, therefore, an attorney's noncompliance with Rule 1400.3 and concomitant breach of Code of Professional Responsibility DR 2-106(c)(2)(b) typically preclude the attorney's recovery of fees in domestic relations matters. Since Rule 1215.1 is not underscored by a specific Disciplinary Rule and is not intended to protect clients against abusive practices, it lacks the 'bite' of 22 NYCRR 1400.3 and Code of Professional Responsibility DR 2-106(c). (Citations omitted).

Lower Court Decisions

The court reviewed the array of lower court decisions on these issues, and noted that these have fallen into three categories:

The first category permits the quantum meruit recovery of attorney's fees notwithstanding noncompliance with 22 NYCRR 1215.1 (Citations omitted) . . . .The second category of cases takes a 'middle ground,' permitting the noncompliant attorney to keep money already received from the client for services, while prohibiting the recovery of additional fees. (Citations omitted) . . . . The third category includes cases from New York, Bronx and Nassau counties, holding that the noncompliance with 22 NYCRR 1215.1 is an absolute bar to recovery of attorney's fees . . . . (Citations omitted) . . . In other words, 'no engagement letter, no fee' (see Davis, 'Engagement Letters: Can't Live Without Them, Can't Change Them,' NYLJ, Jan. 5, 2004, at 3, col 1).

Accordingly, the central holding of the court is that "a strict rule prohibiting the recovery of counsel fees for an attorney's noncompliance with 22 NYCRR 1215.1 is not appropriate and could create unfair windfalls for clients, particularly where clients know that the legal services they receive are not pro bono and where the failure to comply with the rule is not willful." The court notes that its holding would be different were this matter a matrimonial action governed by the more stringent disciplinary requirements of 22 NYCRR 1400.3 and Code of Professional Responsibility DR 2-106(c)(2). However, the Court also points out that

Mr. Rubenstein, as the attorney who failed to properly document the fee agreement in writing as required by 22 NYCRR 1215.1, bears the burden of establishing that the terms of the alleged fee arrangement were fair, fully understood, and agreed to by Ms. Ganea . . . .Providing that Mr. Rubenstein establishes the client's knowing agreement to pay for legal fees not fully compensated by an award from the AIP's estate, Mr. Rubenstein may recover in quantum meruit the fair and reasonable value of the services rendered on behalf of Ms. Ganea prior to his discharge as counsel.

Following a discussion of prior case law, the court also concludes that "the guardianship court's award of reasonable compensation to Mr. Rubenstein pursuant to Mental Hygiene Law 86.16(f) does not bar Mr. Rubenstein's efforts to recover additional fees from Ms. Ganea on a quantum meruit basis. Mr. Rubenstein bears the burden of establishing that he reached a clear agreement with Ms. Ganea that she would be responsible for fees incurred in the guardianship proceeding, including the amount that the fair value of legal services exceeds the amount awarded by the guardianship court. Any misunderstanding or lack of clarity arising from Mr. Rubenstein's failure to provide a letter of engagement or enter into a signed retainer agreement shall be resolved in favor of the client, Ms. Ganea."

Lest the bar treat this decision as some kind of free pass, the court importantly noted that

attorneys continue to have every incentive to comply with 22 NYCRR 1215.1, as compliance establishes in documentary form the fee arrangements to which clients become bound, and which can be enforced through Part 137 arbitration or through court proceedings. Attorneys who fail to heed Rule 1215.1 place themselves at a marked disadvantage, as the recovery of fees becomes dependent upon factors that attorneys do not necessarily control, such as meeting the burden of proving the terms of the retainer and establishing that the terms were fair, understood, and agreed upon. There is never any guarantee that an arbitrator or court will find this burden met or that the fact-finder will determine the reasonable value of services under quantum meruit to be equal to the compensation that would have been earned under a clearly written retainer agreement or letter of engagement. (Emphasis added).

Here is an article from the NYLJ [subscription]:

"High-low agreements in trials for civil damages constitute settlements and should be enforced as such, an appeals court in Brooklyn has ruled in a case of first impression.

A unanimous panel of the Appellate Division, Second Department, ruling in Cunha v. Shapiro, 2006-07880, further concluded that a plaintiff who wants to file a judgment in connection with a high-low agreement must first sign a general release and stipulation of discontinuance, which gives a defendant 21 days to pay an award. Justice Mark C. Dillon (See Profile) wrote the opinion.

The decision will be published Thursday.

High-low agreements set a low and high amount for damages in a civil trial. If a jury awards more than the specified amounts, the plaintiffs accept the high. If the jury awards less, the plaintiff accepts the low. If the jury finds for an in-between amount, that figure is awarded.

In Cunha, Frank Cunha sued Blanche S. Shapiro and the estate of Jesse Shapiro after allegedly sustaining injuries in a minor car accident. Mr. Cunha's attorney, Eitan A. Ogen of Ogen & Associates, said Mr. Cunha needed arthroscopic surgery on his knee as a result of the accident.

Brooklyn Supreme Court Justice Lewis Douglass (See Profile) granted Mr. Cunha's motion for summary judgment in July 2004. The case went to trial for damages in March 2006 before Justice Martin Schneier"

This week we have a raft of Texas Cases  Here attorney was appointed to represent convict father in a parental rights termination case.  Reading the facts, we believe that the court would have terminated the convict's rights anyway, but it was really unhappy about the representation.

"In its opinion, the Court of Appeals noted that Wilson did not put on evidence at the hearing; did not consult with Brice; performed only a "perfunctory cross-examination of Denton," which led to the admission of evidence that Brice had been arrested for harassment, stalking, DWI, indecent exposure, and several cases of indecency with a child; did not request a writ of habeas corpus ad testificandum; did not interview potential witnesses; did not request a jury; and did not investigate the conviction that was the basis for termination. Id. at 140-42. The Court of Appeals also stated, "[N]othing in the record suggests that [Wilson] requested a continuance from the trial court." Id. at 142"

But, nevertheless, the legal malpractice case foundered.  "Brice subsequently filed suit against Wilson for legal malpractice. Brice alleged that Wilson was negligent or grossly negligent in failing to request a continuance; failing to consult with him to determine the facts and prepare a defense; failing to investigate the conviction that was the basis for termination; failing to challenge the pleadings and to present evidence favorable to him; failing to request a writ of habeas corpus ad testificandum; failing to investigate the facts of the case, including the failure to contact Brice's mother and sister, who Brice asserts would have testified on his behalf; and failing to determine that Brice wanted a jury trial. Brice contended that he "suffered the severe damages of not having the effective assistance of counsel at the final hearing on the suit to terminate his parental rights to his two minor children[,]" as well as "physical injuries and the emotional pain and suffering from losing his parental rights to his two minor children." In supplemental petitions, Brice added MacLean, Boulware, and the law partnership of MacLean & Boulware as defendants under theories of agency; negligent hiring, supervision, or retention; and respondeat superior.

The trial court disposition
Wilson, MacLean, and Boulware filed no-evidence motions for summary judgment, in which they asserted that Brice lacked evidence of a breach of duty owed pursuant to the attorney-client relationship, and that Brice had failed to produce any evidence that the alleged breach of duty proximately caused the alleged harm. Brice filed responses, to which he attached copies of the opinion in which the Court of Appeals held that he received ineffective assistance of counsel, a notice from the Supreme Court stating that it had denied review of the case, and a portion of Tex. R. Civ. P. 166a. Brice also filed motions for issuance of a writ of habeas corpus ad testificandum to enable him to appear at the hearings on the motions for summary judgment filed by Wilson, MacLean, and Boulware. The trial court denied Brice's motions for issuance of a writ of habeas corpus ad testificandum. The trial court granted the motions for summary judgment and ordered that Brice take nothing from Wilson, MacLean, and Boulware.

No evidence of damages fatal to claim. The Court of Appeals affirmed the summary judgment, finding that Brice had failed to present evidence of damages, which was an essential element of his legal malpractice claim and of each other claim he presented. "

While diversity of citizenship may be an appropriate base for jurisdiction,  42 USC 1983 is not, at least in Texas  There, the attorney is not a state actor:

"In Combs v. City of Dallas, 3:06-CV-0074-P, 2006 U.S. Dist. Lexis 92445 (N.D. Tex. 2006), the client sought to sue the attorneys who represented him during his state and federal criminal prosecutions. The court held that neither appointed nor retained counsel acts under color of state law in representing a defendant during criminal proceeding. See Polk County v. Dodson, 454 U.S. 312, 324 (1981) (public defender does not act under color of state law when performing a lawyer's traditional functions as counsel to a defendant in a criminal case); Mills v. Criminal Dist. Court No. 3, 837 F.2d 677, 678 (5th Cir. 1988) (court appointed counsel are not official state actors); Russell v. Millsap, 781 F.2d 381, 383 (5th Cir. 1985) (retained counsel does not act under color of state law). The same rationale applies to appointed or retained counsel in a federal criminal case. McLeod v. Knowles, 2006 WL 1738286, *1 (5th Cir. 2006) (unpublished per curiam) (extends Polk County v. Dodson to a Bivens action against court-appointed counsel). As such the conduct of criminal defense attorneys in representing a federal criminal defendant is not cognizable under 42 U.S.C. § 1983 or as a Bivens action.

The client alleged that one of the attorneys had conspired with the prosecutors. Assuming that this sufficiently alleged action under color of law, the court nonetheless found that the legal malpractice claim was barred because it inherently challenged the validity of the client's conviction:

In Heck v. Humphrey, 512 U.S. 477, 486-87 (1994), the Supreme Court held that a party may not maintain a civil rights action based on the legality of a prior criminal proceeding unless a state court or federal habeas court has determined that the terms of confinement are in fact invalid. This rule applies equally to Bivens actions. Stephenson v. Reno, 28 F.3d 26, 27 (5th Cir. 1994). The critical inquiry is whether a judgment in favor of the plaintiff in the civil action would "necessarily imply the invalidity of his conviction or sentence." Heck, 512 U.S. at 486-87. If so, the claim is barred unless the conviction has been reversed or declared invalid. Id.

[. . . Plaintiff's criminal conviction has not been reversed on direct appeal, expunged by executive order, or called into question by a federal writ of habeas corpus. . . . ] "

As in New York, a criminal defendant may not successfully sue his criminal defense attorney absent a showing of "actual innocence"

Here is the Texas rule:

"In Butler v. Mason, No. 11-05-00273-CV, 2006 Tex. App. Lexis 10886 (Tex. App.—Eastland 2006), a convicted murderer attempted to bring a legal malpractice action against the attorney who represented him on direct appeal within the state court system and in state and federal habeas proceedings. The court found that the action was barred by Texas' Peeler doctrine, under which plaintiffs who have been convicted of a criminal offense may negate the sole proximate cause bar to their claim for legal malpractice in connection with that conviction only if they have been exonerated on direct appeal, through post-conviction relief, or otherwise.

In 1998, the jury convicted Butler of murder and aggravated assault. Butler's retained counsel, Harry Zimmerman, perfected an appeal but passed away before oral argument. Mason argued the appeals. Butler later retained Mason to file applications for both state and federal post-conviction writs of habeas corpus. The Texas Court of Criminal Appeals denied the application in 2001. The federal application was dismissed as being time-barred in 2003.

In 2004, Butler filed this suit alleging that Mason was negligent in his handling of the applications for writs of habeas corpus and that Mason breached his contract with Butler. Butler sought a total of $6,000,000 as compensation for lost employment and as punitive damages. The trial court dismissed the case; the court of appeals affirmed:

In Peeler v. Hughes & Luce, 909 S.W.2d 494 (Tex. 1995), the Texas Supreme Court held:

Because of public policy, we side with the majority of courts and hold that plaintiffs who have been convicted of a criminal offense may negate the sole proximate cause bar to their claim for legal malpractice in connection with that conviction only if they have been exonerated on direct appeal, through post-conviction relief, or otherwise. While we agree with the other state courts that public policy prohibits convicts from profiting from their illegal conduct, we also believe that allowing civil recovery for convicts impermissibly shifts responsibility for the crime away from the convict. This opportunity to shift much, if not all, of the punishment assessed against convicts for their criminal acts to their former attorneys, drastically diminishes the consequences of the convicts' criminal conduct and seriously undermines our system of criminal justice. We therefore hold that, as a matter of law, it is the illegal conduct rather than the negligence of a convict's counsel that is the cause in fact of any injuries flowing from the conviction, unless the conviction has been overturned (citation omitted). "

Another Texas case to illustrate the judgment rule in legal malpractice.

"Doing the best you can with what you have is a constant problem in unsettled areas of the law, particularly unsettled areas of statutory construction. Justice Keasler’s concurring opinion in this Court of Criminal Appeals case makes the point:

In Ex parte Chandler, we explained that “a reasonably prudent attorney in Texas is not constitutionally deficient if he relies upon pertinent judicial opinions in assessing the validity of a legal proposition.” Ex parte Chandler, 182 S.W.3d at 358. Moreover, because “‘what an attorney thinks the law is today may not be what a court decides tomorrow[,]’ . . . ‘the rule that an attorney is not liable for an error in judgment on an unsettled proposition of law is universally recognized.’“ Id. (quoting 3 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 18.1, at 2 (5th ed. 2000)). “[C]ounsel’s performance will be measured against the state of the law in effect during the time of trial and we will not find counsel ineffective where the claimed error is based upon unsettled law.” Ex parte Welch, 981 S.W.2d 183, 184 (Tex. Crim. App. 1998) (citing Vaughn v. State, 931 S.W.2d 564, 567 (Tex. Crim. App. 1996)). We also stated that “legal advice which only later proves to be incorrect does not normally fall below the objective standard of reasonableness under Strickland.” Ex parte Chandler, 182 S.W.3d at 359.

Roemer’s counsel’s legal advice was correct at the time he offered it. Counsel relied on the only available opinion dealing with the issue. “[T]he state of the law in effect during the time of trial,” Ex parte Welch, 981 S.W.2d at 184, consisted of a single opinion, which clearly resolved the issue against his client. Counsel thoroughly explained the legal issue and the effect of the court of appeals’ opinion to his client. But the final decision to accept the plea agreement was Roemer’s alone. It could not, therefore, be counsel’s judgment error. Roemer’s counsel’s actions fall squarely within our explanation of effective assistance of counsel in Ex parte Chandler.

Ex parte Roemer, 2007 Tex. Crim. App. Lexis 229 (Tex. Crim. App. 2007) (Keasler, J., concurring, joined by Hervey, J.). "

When a client comes to you to discuss a legal malpractice case, and mentions a bankruptcy, the first question to determine is whether the malpractice might have been pre- or post-petition.  If it was even arguably pre-petition, the bankrupt client must have listed a claim on the schedules.  If not, there can be no legal malpractice case, except by the trustee.

Here is a case from Texas:

"The bankruptcy court in San Antonio has rejected an attempt to bring an unscheduled legal malpractice claim post-confirmation:

It is undisputed that a bankruptcy debtor is required to schedule all assets and that there is a duty to amend which continues throughout the case. It is also undisputed that none of the Debtors scheduled a potential cause of action against Defendant in their bankruptcy schedules, even though Plaintiffs claim that their causes of action relate solely to prepetition conduct of Defendant. Although Plaintiffs contend that Defendant would not have scheduled causes of action against itself, the undisputed evidence shows that Plaintiffs were also represented by counsel other than Defendant at all relevant times. Not only were there outside counsel prior to and at the commencement of the bankruptcy cases, but on June 10, 2004, the Debtors filed an Application to Employ the Law Firm of Langley & Banack as Co-Counsel for the Debtors. The employment of Langley & Banack was approved by this Court's Order on July 15, 2004. The Plan and Disclosure Statement were filed by Langley & Banack on or about December 29, 2004, and the confirmation hearing took place on March 2, 2005. If the directors, officers and non-Defendant attorneys of the Plaintiffs wished to assert claims against Defendant, they had ample opportunity to schedule such an asset and specifically reserve it in the Plan. Instead, a general retention clause was merely placed in the Plan and Disclosure Statement which purported to retain any claims which the Plaintiffs might have against any of their professionals. "

Here is a Texas Case which illustrates the difficulty in plaintiff's summary judgment in legal malpractice.  The court says that expert's affidavit is 'conclusory", but what it really means is that it cannot decide on whether the mistake was all that apparent.

"What “appears” to an expert to be an “inescapable conclusion” is not so apparent to a court. In Tummel & Casso v. Snyder, the lawyers sued to recover fees and the client counterclaimed for legal malpractice. The clients then filed a “traditional” motion for partial summary judgment, alleging that the lawyers had committed legal malpractice in connection with their representation of the clients in two legal matters. Specifically, the clients alleged that appellants committed malpractice by pursuing (on the clients’ behalf) the enforcement of a non-compete agreement against Dr. Michael Sweeney (“the Sweeney litigation”), despite the absence of any chance of successful enforcement because there was no written agreement. Secondly, the clients alleged that the lawyers committed malpractice by filing a lawsuit to protect Dr. Snyder’s right to continue practicing at a surgery center, despite the absence of any chance of success because Dr. Snyder had failed to exhaust his administrative remedies. In support of their motion, the clients attached numerous documents, including copies of the unsigned non-compete agreement. "

The trial court entered summary judgment against the lawyers on the legal malpractice claims. They appealed. The Corpus Christi Court of Appeals reversed, finding the affidavit of the clients’ legal malpractice expert to be conclusory and, thus, insufficient to support summary judgment against the lawyers:

Continuous representation of a client by an attorney allows a law suit within [in NY - 3 years]  a statutory period of time.  That is, the statute of limitations does not kick in until the reprsentation has ended.  When this happens is the subject of many cases.  Here is a Texas case which holds that in a divorce legal malpractice, transactional work on collecting or enforcing the decree does not count as continuous representation.

"'Legal work incident to enforcement of divorce decree does not trigger Hughes tolling rule
This entry was posted on 4/28/2007 9:48 PM and is filed under Limitations and Tolling.

Limitations on a client's claim that she received erroneous legal advice from an attorney that caused her to receive an inadequate share of the marital estate in her divorce decree was not tolled by the Hughes rule, which tolls limitations on a legal malpractice action in some instances of continuous representation. In Brennan v. Manning, No. 07-06-0041-CV, (Tex. App.—Amarillo April 12, 2007), the court found that the lawyer's post-decree work on enforcement issues was not enough to trigger the Hughes tolling rule.

The court first determined when the malpractice claim accrued, applying the legal injury rule to find that the claim accrued when the divorce decree was entered:

Legal malpractice claims are governed by a two year statute of limitations. Tex. Civ. Prac. & Rem.Code Ann. § 16.003(a); Apex Towing Co. v. Tolin, 41 S.W.3d 118, 120 (Tex. 2001). A legal malpractice claim accrues when the legal injury occurs, unless there is a legal basis for tolling limitations. Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 156 (Tex. 1991). Appellant's legal malpractice claim centers upon her allegation that she received an inadequate division of community property when Manning incorrectly advised her that she was not entitled to a share of referral or contingency fees from lawsuits pending at the time of her divorce. Therefore, Appellant's legal malpractice claim accrued when she sustained a legal injury, which would have been at the time the community property was divided by the entry of a decree of divorce. Smith v. McKinney, 792 S.W.2d 740, 742 (Tex. App.—Houston [14th Dist.] 1990, writ denied). "

New York Lawyer [subscription] relates this story:

"Local Lawyer's Conniption Fit at Getting Sued Gets Him Sanctioned

New York Lawyer
May 4, 2007

By Henry Gottlieb
New Jersey Law Journal

When a lawyer is served with a malpractice suit, throwing the complaint on the floor, ejecting the process server for trespassing and yelling "call 911" are possible responses.

But they're wrong, a Mercer County, N.J., judge says in a $403 sanction order against Robert Conroy, one of the state's leading health care lawyers.

Conroy was in his Bridgewater office on March 20, when Guaranteed Subpoena Service Inc. sent a representative to serve a malpractice suit by a doctor Conroy had represented in a complicated transaction.

But Guaranteed reported back to the plaintiff's lawyer: "Not served! Entity was evading service. Threw service at server, stating he was trespassing and would be arrested if he didn't leave."

Conroy says that's not what happened. He says the firm accepted service at the reception desk but the server barged his way into private areas of the office, like a dangerous intruder.

Even so, Superior Court Judge Paul Koenig Jr. found Conroy at fault and called the conduct, "ill-advised, unlawyerlike, and in my opinion, even outrageous."

"He chose to intimidate the process server, someone who works, you know, in close connection with the attorneys to serve court process and court papers," the judge said in an April 11 ruling. "Any attorney should not take such a position, however unhappy he is with the circumstances."

"He's a licensed attorney," the judge continued. "He has an obligation to act professionally. Throwing documents -- throwing court documents doesn't sound professional."

Reported today from Bankruptcy Court:

In re: Ernst, 04-12291
Decided: April 27, 2007

"UNDER A retainer agreement allowing interest on unpaid fees, the lawyer providing legal services to the debtor brought a state action to collect $72,274 in unpaid legal fees from the debtor and his wife. Shortly after entry of an award in the lawyer's favor, the debtors sought Chapter 13 bankruptcy protection. In disallowing the attorney-creditor's claim for fees incurred in collecting on the debtors' bill, the bankruptcy court noted that the Appellate Division, First Department in Ween v. Dow held that fees associated with the collection of unpaid legal fees could not be recovered by an attorney unless the applicable retainer agreement also gave the client the right to recover attorney fees. In Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co. the U.S. Supreme Court emphasized the requirement that bankruptcy courts consult state law in determining the validity of most claims. In rejecting the lawyer's claim, the bankruptcy court noted that the Ween court emphatically declared that a retainer provision identical that used by the lawyer was unenforceable.

"This decision granting summary judgment to the Debtors on their claim objection and disallowing a claim by an attorney-creditor for fees incurred in collecting a bill owed by his former client relies heavily on two recent case law developments - the first in the Appellate Division of the New York State Supreme Court holding that claims such as this one are not enforceable and the second decided last month by the United States Supreme Court emphasizing the requirement that bankruptcy courts consult state law in determining the validity of most claims. Both decisions involve the same underlying subject matter - the contractual right of an attorney to recover counsel fees from a third party. When considered together, these cases compel granting Debtors' Motion for Summary Judgment and disallowing the attorney-creditor's claim. "

Thomas Liotti, who has of late been pushing the bounds of criminal defendant representation, and has, incidently, sued the Nassau County DA, is in the news for an inventive investigation. 

His client was accused of abusing a child.  The child and its parents were the subject of a neglect proceeding in Family Court, and Liotti used that proceeding to generate statements exonorating his criminal defendant.  Result?  Lots of outrage.

From the NYLJ

"A Nassau judge has declined to disqualify from a criminal case a defense attorney who took statements from prosecution witnesses without the permission or presence of their attorneys in a related Family Court matter. In November 2005, the prosecutor filed an information charging Mr. Quiroz, 54, of Freeport, with abusing a 16-year-old retarded girl. Mr. Liotti denied that the girl was retarded.

In February 2006, the Nassau County Department of Social Services brought a neglect motion in Family Court against the alleged victim's mother. The county also commenced a proceeding against Mr. Quiroz. Mr. Liotti served as Mr. Quiroz's attorney in both matters.

Family Court appointed Steven Herman, a solo practitioner in Rockville Center, as law guardian to represent the girl and Connie Gonzalez, of Legal Aid in Hempstead, to represent the mother.

On Oct. 16, 2006, Mr. Liotti wrote to the district attorney asking that the criminal charges against his client be dismissed. He submitted affidavits, dated Oct. 12, in which the girl recanted her accusation and the mother stated that the alleged incident could not have occurred.

Judge Kluewer said that the record "amply demonstrated" that Mr. Liotti did not get the consent of either Mr. Herman or Ms. Gonzalez before communicating with their clients.

Mr. Herman moved in Family Court to disqualify Mr. Liotti on the grounds he had violated DR 7-104 of the state's Code of Professional Responsibility. That provision prohibits an attorney from communicating with an opposing party that the attorney knows to be represented by counsel, unless the attorney has secured the prior consent of the opposing party's counsel.

Mr. Herman also sought to preclude the use of the statements.

Judge Hope S. Zimmerman, now an acting Supreme Court justice (See Profile), ruled that Mr. Liotti had violated the alleged victim's due process rights and disqualified him from representing Mr. Quiroz in Family Court.

Mr. Liotti appealed to the Appellate Division, Second Department, which has stayed the Family Court order pending the resolution of the criminal matter.

Meanwhile, the district attorney's office moved for virtually identical relief in District Court. It argued that Mr. Liotti should be disqualified in light of his attempted use of "improper communications" to seek a dismissal of the criminal matter. Further, the district attorney asserted that it would be contrary to the interest of justice to allow the "product of this improper conduct" to be used.

The prosecutor also suggested that Mr. Liotti might have to appear as a witness "in order to determine the genuineness and circumstances of the purported recantations."

In response, Mr. Liotti argued that neither the girl nor her mother were a "party" to the criminal case. He noted that the girl has turned 18 and was no longer entitled to representation by the law guardian.

Mr. Liotti also claimed that because his associates, and not him personally, appeared in Family Court, he was "not aware" that the girl and her mother had counsel.

Judge Kluewer said she was not persuaded by Mr. Liotti's assertions that he did not know that counsel represented the girl and her mother.

"Given his experience, he certainly should have known of the representation, and neither he nor his associates should have communicated either with the alleged victim, or her mother without the consent of their respective attorneys," Judge Kluewer said.

But the judge agreed that neither the girl nor her mother was a party to the criminal action. And she said that the purposes of the two proceedings were different.

The aim of the criminal action was to determine if the defendant had committed a wrongful act and, if so, to assess blame and impose punishment, the judge said. In that context, a defense attorney is obliged to zealously represent his client and is authorized to conduct the "broadest possible range of pretrial investigation."

By contrast, the Family Court proceeding is essentially civil, Judge Kluewer said. "The real subject of a neglect petition is not the respondent against whom it is brought, but the child it concerns," she said.

The judge noted that the considerations underlying the Family Court ruling did not pertain to the matter before her. But she said that the prosecutor apparently was seeking to punish Mr. Liotti because of factors relevant to the Family Court proceeding.

"I am aware of no public policy or other consideration pertinent to this action that warrants interfering with Defendant's fundamental, albeit not absolute, right to counsel of his own choosing," Judge Kluewer held.

She also declined to preclude statements Mr. Liotti obtained from the alleged victim and her mother.

"Apart from the fact that such a spectre implicates the constitutional right to confront the people's witnesses with prior inconsistent statements in New York, exclusion of a statement is not an appropriate remedy for the misconduct about which the people complain," she said. "

Wife obtained a judgment against her divorcing husband for $ 750,000.  Her attorney took his time entering the judgment, and violated 22 NYCRR 202.48(a), which provides 60 days after the entry of an order directing settlement of the judgment to submit a proposed judgment.  Holding?  Plaintiff loses her judgment!

Farkas v Farkas
2007 NY Slip Op 03762
Decided on May 1, 2007
Appellate Division, First Department

"The Court of Appeals has recently made it clear that "statutory time frames - like court-ordered time frames - are not options, they are requirements, to be taken seriously by the parties" (Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d 725, 726 [2004] [citation omitted], following Brill v City of New York, 2 NY3d 648 [2004]). Thus, where a statute or court rule prescribes a limited time frame in which to take a procedural step in litigation, and states that a party's failure to act within that time frame will be excused only upon a showing of "good cause," such a showing requires demonstrating, as the dissent puts it, "more . . . than [the] merit . . . [of] the underlying application and a lack of prejudice to the other party." This bench is unanimous in holding that this principle applies in the instant case, in which plaintiff failed to comply with the 60-day time frame for the submission of a judgment to the court for signature (Uniform Rules for Trial Cts [22 NYCRR]
§ 202.48[a], [b]). Because plaintiff has failed to show good cause for her failure to comply with the time frame set forth in the Uniform Rules, we are constrained to reverse and vacate the judgment. "

For the entire case.

Legal malpractice is sometimes just about missing a deadline.  Sometimes its just about being lazy.  One recurrent theme is attorneys taking on a field in which they do not understand the subtle problems.  Here is an example:

"One of the Prohibited Words is the phrase “prior art”. There is no reason whatsoever for the words “prior art” to appear in any patent application. Making any characterization of prior art is opening an avenue for attacking an issued patent and may unnecessarily complicate patent prosecution.

When someone cites “prior art” in a patent, they are making some characterization or drawing a comparison to what they think the prior art may be. In order to attack the patent, it may be possible to show that the prior art was actually something different or could be characterized in a completely different manner. This could lead to rendering the patent invalid through inequitable conduct, or at least show the patent in a bad light in front of a (non-technical) judge and jury who are hearing the case.

Characterizing prior art may complicate prosecution because an Examiner may take exception to your assertion that the prior art is one thing while the Examiner may characterize the same text as another thing. I don’t know if using any of the Prohibited Words rises to the level of legal malpractice, but overuse or sloppy use of terminology does indicate a low level of proficiency in patent drafting. My very first patent application, written without the help of a patent attorney or agent, was replete with the Prohibited Words. "

Here, from the subscription Chicago Daily News is a snippet in which a high ranking Illinois State Police official has sued the State Attorney General for a sloppy defense of a trooper, or so the short blurb implies. 

 "An Illinois state police colonel has filed a legal-malpractice lawsuit against the state attorney general and two of her assistants alleging that they failed to adequately represent the officer in a federal case. "

If you have a subscription, read on.  Send me the story.

Its a concept rarely seen or heard, and even more rarely invoked because of the county, not country where the law suit is brought.  Guess?  The law firm is defending itself in this legal malpractice case, and has a little too much time on its hands.

The Madison County Record, a newspaper which frequently features news about legal malpractice reports:

"The Illinois Appellate Court in Mt. Vernon unanimously affirmed St. Clair County Circuit Judge Lloyd Cueto's decision to deny a motion to dismiss a legal malpractice case pursuant to the doctrine of forum non conveniens.

Rick Rosen and the Rosen Law Firm had argued to Cueto that St. Clair County was an inappropriate forum for Ivan Brant's professional negligence and fraud claims arising from the defendants' representation of the plaintiff.

Rosen and his law firm are both reside in St. Clair County.

Brant filed a six-count complaint against Rosen, the law firm, and a third defendant, Dwight Hardin, who is employed as a consultant by Rosen's firm.

He alleged that he retained Rosen and the law firm to represent him in his Federal Employers' Liability Act (FELA) for damages against his employer, Union Pacific Railroad, for injuries he received during the course of his employment.

Brant alleged that both Rosen and Hardin told him that they were licensed, practicing attorneys, even though Hardin allegedly was not an attorney.

Brant alleged Rosen and Hardin negligently "instructed and counseled" him to settle his FELA case against the railroad for less than its fair value, failed to conduct an adequate investigation into the liability and damage evidence, and settled his case without filing suit or conducting any discovery and before he attained maximum medical improvement.

He also alleged that he received substantially less in settlement for his case than it was worth and, therefore, "suffered significant damages in the form of inappropriate compensation for past and future medical expenses, past and future wages, pain, suffering, disability and disfigurement."

In addition to the professional negligence claims, Brant also claimed that each defendant was guilty of fraud because Rosen, individually and through the law firm and Hardin made several untrue statements.

According to Brant, he was told that he was required to accept Union Pacific's settlement offer of $150,000 or be forced to accept $20,000 and relocate to Utah as a security guard. "

Closely akin to legal malpractice, here an Iowa County defends its sheriff's negligence in process service.  In New York, the attorney may be held responsible for the process server's negligence.  Here the county is defendant:

"Douglas County might have to pay a hefty price for an employee's failure to deliver.

The county finds itself as the defendant in a medical malpractice lawsuit because, contrary to a civil process server's contention, the original defendant was never served papers.

Eugenia Kudym of Omaha is asking for $450,000 in damages -- the amount her attorney said she could have recovered from her physician after she suffered complications from gastric bypass surgery in 2003.

A judge last year ruled that a server from the sheriff's department did not properly serve Kudym's physician. Meanwhile, the statute of limitations for malpractice lapsed, eliminating the physician from possibly having to pay damages. "

For the county to be held liable, Blakeman must prove malpractice occurred and that the county's error cost Kudym the opportunity to seek damages from the physician.

"The more difficult side is proving the medical malpractice claim," Blakeman said Monday. "The fact the judge has decided (the county) didn't successfully serve the doctor sits in our favor. In essence, it's been determined that the county didn't perform."

It's not strictly legal malpractice, but rather use of the term as a metaphor.  Federal Magistrate Judge alleges its "almost" legal malpractice when a Federal prosecutor acts to leverage his case. 

"Charges against the lead suspect in a major federal drug case should be dismissed because of trial delays caused by prosecutors, a federal magistrate judge has recommended.

The recommendation, which the U.S. Attorney’s Office disputes, would have to be accepted by U.S. District Judge Rebecca Doherty before the case against George Celestine is dismissed.

Celestine, who could face up to life in prison if convicted, was indicted with three other men in what prosecutors allege was a drug ring they operated for 10 years moving cocaine from Houston to Lafayette.

The men were initially charged in 2001, and the case has stretched on for more than five years and spawned three mistrials.

The most recent was in June, when a judge questioned Assistant U.S. Attorney Todd Clemons’ apparent non-compliance with an order to provide defense attorneys with a list of un-indicted coconspirators — people allegedly involved in the drug ring who were going to testify against Celestine.

Doherty had ordered Clemons to hand over a list of the names in 2003 but he did not comply until the morning of the third trial in June, according to the U.S. Magistrate Judge C. Michael Hill’s report and recommendation for dismissal.

Hill wrote that the failure to hand over the names resulted in mistrials that have violated Celestine’s Sixth Amendment right to a speedy trial.

Hill characterized Clemons’ actions as falling somewhere between “bad faith” and “legal negligence” and appeared to be an attempt to gain a tactical trial advantage at the expense of not following a court order. "

Attorneys performing work for which there can be no liability ?  Immunity from being sued ?  When and why would this be permitted ?

Law guardians, selected by a judge, assigned to a child, supposed to protect the kid's rights often do a wonderful job.  However, the field of legal malpractice is devoted to the fringe group of poor performers.  Does this social policy of immunity held or hinder the social policy of protecting children?

This article from Kentucky thinks not:

"A recently released report on legal representation for foster children gave Kentucky a "D" for the representation it provides to abused and neglected children, according to officials from Kentucky Youth Advocates.

First Star, a national child advocacy organization based in Washington, issued the report, giving grades to states based on mandates for representation, training requirements, children's involvement in proceedings and attorney immunity from malpractice.

Kentucky was one of six states to receive a "D" grade based on a 100-point index; 15 states received failing grades. Kentucky received a score of 60 out of 100. Neighboring states received a range of grades. Illinois, Indiana, and Missouri were given failing grades, Ohio received a C, Tennessee got a B, and West Virginia got an A.

The group made recommendations to the Kentucky legislature that included developing training for attorneys, requiring that children keep the same attorney if possible, and giving children the right to legal representation during the appeals process.

The First Star report also recommended that children's attorneys have caseload and compensation levels that allow for "effective assistance of counsel."

"While Kentucky guarantees attorneys for children in its child welfare system, the issue of quality representation is simply not adequately addressed," said Dr. Terry Brooks, executive director of Kentucky Youth Advocates. "At a broad level, we can do more to support the quality issue through proactive legislation in 2008 and a focused commitment from the legal profession. On a pragmatic basis, issues like increasing fees for court-appointed attorneys are imperative if we really want to tackle the quality issue."

Paul et al. v. Smith, Gambrell & Russell, et al., ___S.E.2d___, 2007 WL 474185 (Ga. App. 2007) .  Hinshaw report tells us:

"The Georgia Court of Appeals held that the plaintiffs’ proof of a malpractice claim based on alleged inadequate witness preparation could not prevail because the plaintiffs had not provided sufficient evidence that the outcome of the case giving rise to the malpractice claim would have been more favorable but for the alleged malpractice. With regard to a separate claim, however, the court held that the clients’ review prior to signing of on an allegedly negligently drafted corporate document did not give rise to a defense to a malpractice claim where, as here, the legal significance of the document was not sufficiently clear to the clients"

Malpractice is a professional's failure to use minimally adequate levels of care, skill or diligence in the performance of the professional's duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome."

The first element of a relationship between the client and the professional was previously discussed. The second element, deviation, is shown by evidence, not necessarily expert, which shows that the acts of the professional fell so below the good and accepted practice of law in New York, that a jury would be permitted to find that the acts below standard.

Expert testimony is necessary when the deviation is subtle; an example could be the failure to supply an affidavit of merits to restore a case marked off calendar, the failure to respond to a CPLR 3216 notice, or failures in response to a motion for summary judgment. Expert testimony is not always necessary however. None is needed to demonstrate the deviation in failing to file within the statute of limitations. Bad outcome do not necessarily equal a deviation. Furthermore, questions of judgment of strategic choice cannot serve as the basis of malpractice. An attorney is permitted the reasonable choice of strategy, if supported by acceptable reasoning. The strategic choice must be reasonable both objectively and subjectively. The difference between strategic choice and mistake are subtle, and create the most difficult cases.

The third element of proximate cause encompasses both the typical analysis that arises in all negligence litigation and the additional element of "but for." The plaintiff must demonstrate not only that the deviation was a substantial cause of the poor outcome, but must additionally show that "but for" the deviation there would have been a different, better or more positive outcome. An example of this potential difficulty arises in an automobile accident. No matter how many deviations are shown, it may be that the maximum insurance for the other driver limits the recovery. If that is true, it will be impossible to show that "but for" the deviation, more than the policy limit was available and could have been recovered from the defendant.

This Article from Kim at the Daily News:

"Rotten lawyers face raft of raps in ripoffs
NY DAILY NEWS

Sunday, April 29th 2007, 4:00 AM

Meet some of New York's lousiest lawyers.

One spent $131,000 of his clients' money on vacations, jewelry, lingerie and home improvement.

Another charged 76 clients $11,500 each for filing a simple application that should have cost no more than $700.

And a third deceived an elderly couple into investing their life savings - $222,000 - in a suspect real estate deal.

All three lawyers are among the scores of attorneys cited for misconduct last year by judges of the Appellate Division of State Supreme Court. None has been disbarred.

Individual client losses range from as little as $500 to more than $6 million, according to cases ruled on last year.

"The elderly and immigrants are among those preyed upon by some attorneys, but there are plenty of wealthy victims and businessmen as well," said Thomas Cahill, chief counsel for the Disciplinary Committee of the division's 1st Department, which covers Manhattan and the Bronx.

The public record of the court's discipline begins with censure, a reprimand that goes on the lawyer's record but does not prohibit the lawyer from practicing.

One attorney censured last year was Ronald Sims, of Hackettstown, N.J., who was cited for "repeatedly touching and pinching his secretary's buttocks, attempting to kiss her, and grabbing her hand and hip," according to court documents.

Sims declined to return telephone calls.

"Some of the lawyers we come across are in a state of denial," said Cahill, who is the chief prosecutor of attorney misconduct in Manhattan and the Bronx.

"We hear all kinds of excuses for their actions. Pre-traumatic stress syndrome was one. Of course that's impossible, but I'm not kidding. Another lawyer said, 'I got depressed because I found out I was adopted late in life,' and he had a therapist come in and testify that he was severely depressed," said Cahill.

But invariably, Cahill said, greed, gambling or substance abuse are the major causes of severe misconduct by lawyers.

"I have heard the 'Park Ave.' or 'Great Neck' defense, where they say they needed the money to maintain a certain lifestyle," said Cahill.

His office, which polices the 76,777 lawyers in Manhattan and the Bronx, has a staff that includes 20 full-time attorneys, many of whom are former prosecutors, investigators, an accountant and paralegals.

It handles about 3,500 matters a year in a complex process that begins with screening of complaints.

Out of that total, however, only a small number result in penalties for attorneys, not because the office is lax, but rather because many consumer complaints fall outside its mandate.

The Daily News reviewed the records of some 300 disciplinary proceedings.

Most ripoffs by attorneys involve theft from escrow accounts and trusts and estates or billing for work that wasn't done, according to an analysis by the state Lawyers Fund for Client Protection.

"In a real estate practice you have large pools of money in your accounts at various times, and some lawyers dip their hands in," said Steven Krane, a former president of the state Bar Association.

Here are some of the lousiest of the lousy:

Pizza shop owners say lawyer took a big slice

Chase Caro, 48, of White Plains, who practices in Manhattan and Westchester County, represented Frank and Francesca Salvi when they sold their restaurant, Francesca Pizza and Pasta, in Shrub Oak. The price was $354,900, but the Salvis didn't get the money. Instead, Caro deposited $319,000 of the funds into his business account, according to a Disciplinary Committee investigation. Another check for the remaining $35,900, is still being traced.

The probe, which led to Caro's suspension, also found he deposited $470,143.05 into his business account from the sale of a Peekskill home owned by Herbert Newkirk, 70.

Newkirk received a worthless check.

"It bounced," said Newkirk, a widower. "Insufficient funds. Caro didn't do anything but swindle me."

"One third of my practice is pro bono," Caro said. "I'm sure when I get my chance to put my side of the story out, I'll be exonerated."

Money mess

Frank DeGrasse, 46, of North Salem, with offices in Westchester County and the Bronx, is accused of mishandling a divorce matter, mishandling escrow money, commingling funds, negligence in real estate matters, and failure to pay taxes.

Investigators found DeGrasse also improperly deposited clients' escrow money in his personal account, and spent $131,000 at gas stations, Circuit City, The Athlete's Foot, restaurants, gym clubs, Home Depot, Frederick's of Hollywood and Bailey Banks & Biddle, a jewelry store.

"I went to him for an uncontested divorce. I paid him $500," said Tawanna Arnold, of Newburgh, Orange County. "He didn't follow through. Then I went to his office, sat there and waited for him. I called him a lot of times, but he never showed up and never returned the calls."

DeGrasse has not responded to phone calls, letters or subpoenas from the Disciplinary Committee. On Nov. 9, he was suspended from practice.

Last month, in a separate matter, DeGrasse pleaded guilty in Suffolk County Supreme Court to participating in a $750,000 mortgage scam.

'Shocking disregard'

Barry Spiegler, 67, of New City, Rockland County, was suspended from practice on Aug. 3 pending further disciplinary proceedings. He allegedly misappropriated $27,000 in estate funds in one case and did no work for a $10,000 fee in another.

Spiegler has a "shocking disregard for the judicial system" and "threatens the public interest," the Appellate Court judges wrote. He still hasn't responded to the Disciplinary Committee nor did he return phone calls from The News.

Corner of conflict

Over a four-year period, Suzanne Drysdale, 40, of Flatbush Ave., Brooklyn, represented approximately 200 clients buying real estate. In what the Appellate Court judges called "an impermissible conflict of interest," she had her clients buy title services at a company next door that she also owned. Drysdale declined comment.

Jewel of the guile

Lawrence Newman, 60, with offices on Third Ave., in Manhattan, specialized in recovering money on claims filed with insurance companies. He had many clients in the Diamond District, including Rakesh Barmecha, who complained to the Disciplinary Committee that Newman owed him $127,000, part of an insurance claim payment in escrow for gems that were stolen.

A committee audit of a relevant 10 months' activity in Newman's escrow account showed "disbursements totalling more than $1.3 million, the majority of which ($1 million) were checks issued by respondent to himself." But apparently there was no money for Barmecha.

In the end, investigators found "uncontested evidence of misappropriation of $320,000." On Oct. 10, Newman was suspended pending further action by the court.

Newman declined comment. Meanwhile, Barmecha said eventually he got his $127,000 in a complicated arrangement. "But it cost me $25,000 to get what was owed me. Believe me, it was a learning experience," he said.

Clients left high and dry

Linda Stanch, 53, formerly of Manhattan, now living somewhere in the Midwest, worked as an attorney for the city Corporation Counsel's office and then opened her own practice. In 2003, she ran unsuccessfully for Manhattan Civil Court judge in the Democratic primary.

On Oct. 17, Stanch was suspended from practice after telling the Disciplinary Committee she abandoned six clients because she was "the victim of stalking and harassment by an ex-boyfriend whom she feared could still harm her," according to court documents.

She also said that she had been "diagnosed with depression and anxiety."

For months - even while she still lived in Manhattan - she had ignored the committee's phone calls, letters and subpoenas. Finally, she wrote the committee that her mother had bought her a plane ticket so she could leave town with her children. "

Divorce attorney sues for legal fees and applies a retainer which has a legal fee for collection provision.  In a rare instance, attorney loses all around:

"Reisman, Peirez & Reisman LLP v. Gazzara, 2823/02
Decided: March 30, 2007

"In this action plaintiff law firm seeks to collect unpaid attorneys fees for services performed for the defendant in a matrimonial action. According to the Complaint, plaintiff law firm provided legal services beginning August 9, 1999 and continuing through April, 2001. It further alleges that on or about April 30, 2001 plaintiff served upon defendant a Notice to Arbitrate package pursuant to the Rules of the Chief Administrator, 22 NYCRR §136.5, but defendant has never filed a request to arbitrate. Plaintiff contends that it is owed $30,538.20 plus expenses of $1,263.26 plus interest in outstanding legal fees.

In its Complaint plaintiff asserts four causes of action seeking the $30,538.20 plus interest and fees, under the theories of breach of contract, payment for services performed, account stated, and quantum meruit. In its Fifth cause of action it also seeks reasonable attorneys fees in having to prosecute this claim, as it claims it is expressly permitted pursuant to the retainer agreement between the parties.

Defendant Answer consists of general denials and five defenses, including failure to state a claim, breach of contract in failing to obtain the divorce, false billing, and negligent prosecution of the underlying matrimonial action.

Plaintiff claims that the general denials and claims contained in the defendant's Answer do not raise a triable issue of fact with respect to defendant's liability for the sums sought. Further, the firm claims that now that discovery and the depositions of the parties have been completed, there is no question of fact preventing summary judgment on its behalf.

Account Stated

The plaintiff's Second cause of action seeks to recover on an account stated theory. Attorneys fees may be recovered on the basis on an account stated. (Bartning v. Bartning, 16 AD3d 249 [1st Dept, 2005]). Insofar as the rules of the Chief Administrator of the Courts provide for the arbitration of fee disputes (22 NYCRR §136.5), they pose no obstacle to a plenary action where, as here, the Complaint alleges compliance with the requirement of that the client receive notice of the client's arbitration rights and further alleges that there has been a failure upon the part of the client to request arbitration. (Idid., contrast Lewis & Merit v. Smith, 170 Misc2d 192 [Sup. Ct. Nas., 1996]).

The common law elements of a cause of action for an account stated are: the existence of a debtor-creditor relationship, a mutual examination of the claims of the respective parties, the striking of a balance, and an agreement, express or implied, that the party against whom the balance is struck will pay the debt. (Bank of New York v. Santarelli, 128 Misc2d 1003 [County. Ct., Greene, 1985]). The rationale for permitting a recovery on an account stated theory is that the parties have, by their conduct, evidenced an agreement upon the balance of an indebtedness. (Interman v. R. S. M. Electron Power, 37 NY2d 151, 153-154 (1975)). In Newburger-Morris Co. v. Talcott (219 N.Y. 505, 512 (1916) Judge Cardozo wrote;

"There is no doubt that an account stated may sometimes result from the retention of accounts current without objection (citations omitted). But the result does not always follow. It varies with the circumstances that surround the submission of the statements (citations omitted) and those circumstances include, of course the relation between the parties."

Among the circumstances to be considered is whether an objection has been made to the account within a reasonable time. (Interman v. R. S. M. Electron Power, supra at 154; see, Corr v. Hoffman, 256 N.Y. 254, 267 (1931)).

The plaintiff offers copies of what are represented to be monthly statements sent to defendant commencing Oct. 25, 1999 and continuing through April 25, 2001. During her pretrial deposition Defendant acknowledged receiving monthly invoices reflecting the work performed by plaintiff law firm. (Deposition of Nancy Gazzara, page 27). However, because defendant had given a deposit of $10,000 with the retainer, the first statement to show a balance due was that of Aug. 25. 2001. Monthly bills showing a balance due were sent each month thereafter through April of 2001. However, the deposition of Seymour J. Reisman on behalf of plaintiff gave rise to some doubt as to the accuracy of the proffered statements and whether they were the statements actually sent to defendant.

Defendant avers that after receiving the Jan. 25, 2001 invoice she telephone Lanny Greenberg, an associate with Reisman, Peirez & Reisman, and then met with her at the law office. Defendant claims that she was advised that, "monies for attorneys' fees would be advanced and collected at the time of settlement." Defendant also asserts without a time frame that she complained about "excessive charges" to Ms. Greenberg who referred her to Mr. Reisman. Defendant claims that repeated efforts to see Mr. Reisman were unavailing. Defendant also makes a specific challenge to a $1,5000 item on the Mar. 25, 2001 statement identified as time spent drafting and revising a stipulation of settlement.

The court has been provided with a copy of a letter dated May 12, 2001, sent to a prior Justice upon the Plaintiff's application to be relieved. In that letter, in addition to the contentions just discussed, defendant challenges an item on the April 25, 2001 statement for a meeting she had with plaintiff solely to discuss fees and billing for a second deposition she claims was unnecessary.

While it is uncontested that there was a retainer agreement and an attorney-client relationship in which plaintiff provided professional services, nevertheless there are material issues of fact which preclude the granting of summary judgment. There was no history of defendant paying statements on receipt. (See, Paul, Weiss, Rifkind, Wharton & Garrison v. Koons, 4 Misc3d 447 [Sup. Ct., New York County, 2004]; Milstein v. Montefiore Club, 47 AD2d 805 [4th Dept, 1975]). Nor is it claimed that Defendant made any partial payments. (See, Parker Chapin Flattau & Klimpl v. Daelen Corp., 59 AD2d 375 [1st Dept, 1977]). Whether, under the circumstances of this case, a delay of five months before challenging the statement of account was reasonable, is a question of fact. The excerpts of the defendant's pretrial deposition which plaintiff cites may be admissions and may perhaps be used for impeachment purposes at trial, but they are insufficient to support a granting of summary judgment. (Knepka v. Tallman, 278 AD2d 811 [2d Dept, 2000]).

Moreover, as will be discussed in greater detail hereinafter, Defendant raises an issue as to whether plaintiff is precluded from recovering any fee because of a failure to comply with the filing requirements of 22 NYCRR §1400.3. For present purposes it suffices to note, " . . . [E]ven an unpleaded defense may be invoked to defeat a summary judgment motion or serve as the basis of for an affirmative grant of such relief in the absence of surprise and prejudice, provided the opposing party has a full opportunity to respond (citations omitted)." (Sheils v. County of Fulton, 14 AD3d 919, 921 [3d Dept, 2005]).

Plaintiff's Claim for Attorney's Fees

Plaintiff's Fifth cause of action seeks to recover reasonable costs and attorneys fees incurred in seeking to collect under the Retainer Agreement. Page 3 of the Retainer Agreement states; "Bills not paid within 30 days will accrue interest at the legal rate (presently nine [9 percent]), and you will be liable for reasonable attorneys' fees for the collection of said sum." (Emphasis supplied). Absent a provision for a reciprocal allowance for attorneys' fees to the client should he or she prevail, such a provision is unenforceable as lacking in mutuality and fundamentally unfair. (Ween & Associates v. Dow, 35 AD3d 58 [3d Dept, 2006]). A unilateral provision as in this retainer agreement has also been faulted because of its "distinct potential for silencing a client's complaint about fees for fear of retaliation for the nonpayment of even unreasonable fees (citations omitted)." (id. at 63).

Filing Requirement of 22 NYCRR §1400.3

The Defendant contends that she is entitled to summary judgment dismissing all of plaintiff's claims for recovery because of an alleged failure to comply with the requirement of 22 NYCRR §1400.3 that a copy of the retainer agreement be filed with the court. That rule requires in pertinent part; "Where substitution of counsel occurs after the filing of the net worth statement, a signed copy of the attorney's retainer shall be filed with the court within 10 days of its execution. Here the retainer agreement bears a date of Aug. 9, 1999. At his deposition Seymour J. Reisman testified that he assumed that the retainer agreement was filed with the Court and that it was certainly filed with the motion for pendente lite relief that his firm made during the period it represented defendant.

While an attorney who does not comply with 22 NYCRR §1400.3 "is precluded from seeking fees from his or her client," a fee may nevertheless be recovered "where there is substantial compliance . . . ??." (Mulcahy v. Mulcahy, 285 AD2d 587, 588 [2d Dept, 2001]). Generally, the finding of a lack of substantial compliance has been based upon a complete, nearly complete or flagrant disregard for the applicable rules. (See, Sherman v. Sherman, 34 AD3d 670 [2d Dept, 2006]; Wegman v. Wegman, 8 AD3d 263 [2d Dept, 2004]; Mulcahy v. Mulcahy, supra). On the other hand, a technical violation which does not undermine the underlying policy of protecting the public from known abuses in the field of matrimonial law will not prevent a recovery. (Gross v. Gross, 36 AD3d 318 [2d Dept, 2006]). Here it has not been clearly established whether or when the retainer agreement was filed with the court.

Plaintiff argues that Defendant's failure to plead such a defense constitutes a waiver any claim of noncompliance with applicable matrimonial rules. Because the matrimonial rules were promulgated to address abuses in the practice of matrimonial law, a failure to comply gives rise to a "preclusion" of the attorney from recovering a fee, rather than a defense. (Julien v. Machson, 245 AD2d 122 [1st Dept, 1997]). It would appear contrary to the policy underlying the rules to find a waiver particularly where the issue arises before trial and any prejudice may be avoided. Even defenses waived under CPLR 3211 (e) may be interposed in an amended answer absent surprise or prejudice resulting from the delay. (Nunez v. Mousouros, 21 AD3d 355, 256 [2d Dept, 2005]). And, as noted above, an unpleaded defense may defeat summary judgment or support reverse summary judgment absent genuine surprise or prejudice and provided there is a full opportunity to litigate the issue. (Sheils v. County of Fulton, 14 AD3d 919, 921 [3d Dept, 2005]).

The Facts surrounding the filing of the retainer agreement and the accuracy and issuance of statements of account to defendant are not sufficiently clear to permit a summary disposition. As to plaintiff's First, Second and Fourth causes of action issues of fact including not only the question of substantial compliance with the matrimonial rules, but also as to the extent and value of the services provided require trial.

Both motions for summary judgment are denied except that Plaintiff's Fifth cause of action seeking fees and disbursement pursuant to the Retainer Agreement in connection with its effort to collect for services rendered. Defendant's motion for summary judgment  it is so ordered."

The Kentucky Divorce Law Journal reports this legal malpractice case. Baker v. Coombs  Here is the DLJ's analysis:

"Baker filed for divorce from her husband, Collins, in 1989. A divorce decree, which referenced their Property Settlement Agreement, was entered in 1990. As part of the Agreement, Collins agreed to pay Baker $500,000. A balloon payment of $300,000 was due by January 1, 2002 and the remaining $200,000 due in ten annual installments of $20,000 continuing through January 1, 2001. The Agreement also provided that if the balloon payment was paid prior to the due date, the other payments would be forgiven. As security for the payments, Baker was given liens on all of Collin’s stock holdings of closely held corporations. Collin was to “execute all necessary documents to effectuate these liens” and “the Certificates shall be held by Ronald Coombs, Attorney.” Coombs represented Collins in the divorce proceedings and in other matters.
Despite the Agreement, Collins never gave Coombs any stock certificates before Collins died in September 1999. Coombs asked Collins for the certificates, but Collins never delivered them. Shortly before Collin’s death, Baker discovered that he had sold his interest in his largest corporation in 1992 without perfecting a lien in his stock holdings and making the agreed upon transfer to Baker. Baker did not know what happened to the other corporations, but none of them were listed as assets of his estate. Baker did not know whether any liens were ever prepared and she could not recall inquiring as to the liens or certificates prior to Collin’s death.
In November 1999, Baker filed a proof of claim against Collin’s estate for monies owed to her under the Agreement. The estate objected. Therefore in December 1999, she filed a complaint against the estate, Collin’s widow, and Coombs. Baker alleged that properties were transferred out of Collin’s name, prior to his death, in a deliberate attempt to prevent the payment of monies he owed to her and to reduce the inheritance of his child. She also alleged that Coombs failed to follow the terms of the Agreement in not holding the stock certificates and allowing Collin’s to sell his businesses without taking action to assure that Baker be paid what she was owed.
Baker was awarded a judgment against the estate. Baker and Coombs then filed cross motions for summary judgment. The trial court concluded that Coombs did not commit professional negligence and that he was not personally liable for the monies Collins owed Baker. The court held that Coombs signed the Agreement only in his capacity as Collin’s counsel, and not as a party to the Agreement. Therefore, only Collins and his estate could be held liable. Baker appealed.

Analysis:

On appeal Baker argued: 1) Coombs placed himself in the position of becoming a fiduciary to her by agreeing to hold the stock certificates, and 2) she should be deemed a third party beneficiary of Coomb’s legal services because he agreed to hold the stock certificates as security for the payments owed to her. Baker argued that, under both theories, Coombs had an affirmative obligation to obtain the stock certificates from Collins, to compel Collins to provide them, or to advise Baker that he had not obtained them.
Regarding Baker’s argument that Coombs owed her a fiduciary duty as a result of being mentioned in the Agreement, the Court first noted that no such duty arose solely from the fact that Coombs signed the Agreement. CR 11 requires that attorneys sign pleadings. Next, the Court noted that in the Agreement Coombs, in effect, designated himself as a de facto escrow agent on behalf of Baker as to the certificates, despite his representation of Collins. Coombs created the appearance that a fiduciary duty might have arisen. However, after examining the literal language of the Agreement, the Court found that Coombs was obligated to hold and secure the certificates only after they were placed in his possession. Coombs had no affirmative duty to obtain the certificates or notify anyone that he was not in possession of them. Since Coombs never took possession of the certificates, his arguable duty to Baker never arose. It remained inchoate and unenforceable. If he had received the certificates, he would have been obligated to Baker for having voluntarily agreed to assume the fiduciary duties attached to holding the certificates.
Regarding Baker’s second argument, the Court noted that a legal malpractice claim may arise only to the attorney’s client. However, an attorney may still be liable to a third party because of events arising out of his representation of a client if the attorney’s acts are fraudulent or tortuous and result in injury to that third person. Liability may be found where the attorney is responsible for damage caused by his negligence to someone intended to be benefited by his actions regardless of any lack of privity. The Court found that absent willful and wanton conduct, fraud, or malice, Coombs owed no duty of care to Baker as a third party beneficiary since Coombs had a contractual obligation to represent Collins against Baker as the adverse party in the divorce proceedings.
The Court observed that Coombs became involved in a situation which had the potential to create a conflict of interest between him and his client. The Court warned that attorneys should review SCR 3.130, Rule 1.7 before taking similar steps and obtain prior clear consent from the parties if they choose to embark on an analogous course to preclude similar litigation.
Affirmed. "

This story tells us about a NJ Police officer and wife who have a legal malpractice case proceeding:

"Suspended Roxbury Police Sgt. Richard Winstock and his wife, Jennifer, have gone on the attack by filing a legal malpractice lawsuit that accuses a Ridgewood attorney of giving them shoddy advice about a social club they opened in Dover in 2004.

The club, in a warehouse on Richboynton Road, was raided as an alleged illegal poker casino two years ago -- April 29 into April 30, 2005. By August 2005, the Winstocks, Roxbury Officer Thomas "TJ" Juskus and three others were indicted on charges that include official misconduct and maintaining a gambling resort.

The Winstocks' lawsuit, obtained by the Daily Record, is ready to be filed on Monday by attorney Gabriel H. Halpern in Superior Court in Morristown to comply with a two-year statute of limitations that corresponds with the raid. It accuses attorney Amato Galasso of negligence, incompetence and breach of duty in the advice he gave the Winstocks about the legality of the club.

Richard Winstock was suspended "

From the AP:

"Alexander T. Harvey has a choice to make before the end of next month: apologize for skipping out on jury duty or serve 30 days behind bars.

During questioning last week in court in Fremont, Neb., by attorneys to determine the jury makeup for a three-day civil trial, Harvey asked to be excused to go to the restroom. When told he would have to wait, Harvey got up and left the courtroom -- never to return.

"The court was not amused," Harvey said.

A few days later, Harvey was subpoenaed back to the court, where Judge John Samson told him he had until May 21 to write an apology letter or turn himself in.

"They take fulfilling your complete jury duty very seriously," said Harvey, 51. "It was my mistake and I shouldn't have done that, and I'm going to write the apology."

Harvey gave a number of reasons why he didn't think he was going to make the jury: He said he knew the plaintiff in the case and said he didn't like the way an attorney was questioning him.

But he said he's learned his lesson.

"It's not certainly a landmark case but it was an education," he said. "

Here is the website from this Press Release seen today:

"A new Website includes documents from actual cases and legal actions taken against lawyers. This information should be, but is not, readily accessible to the public. The Web site aims to educate viewers about choosing an attorney -- through research.

Raleigh, NC (PRWEB) April 27, 2007 -- An unusual new Website, LousyLawyer.info, is not a gripe site but an educational tool for consumers who need to hire lawyers.

LousyLawyer.info includes lists of lawyers disciplined by various state bar associations, sued for malpractice, and/or indicted on criminal charges. Viewers can click links to the legal documents that support this information.

The Website is an example of the type of research consumers need to do before hiring a lawyer. Consumer advocate and author Gloria Grening Wolk failed to do this research on her own behalf, when she hired a lawyer recommended by another attorney. Now she is suing an attorney who she claims extorted money from her.

"I learned the hard way," said Wolk, who used research to help another victim of lawyers find a competent, trustworthy attorney in another state. "

Judicial Reports tells the tale of a 4 time elevator plaintiff who eventually lost and then sued his attorneys.  The case doesn't come right out and say it, but:

"The plaintiff allegedly was injured in several elevator accidents at his place of employment. An action to recover damages for personal injuries was commenced against the companies that maintained the elevators. In the instant action, the complaint alleges, inter alia, that the defendants Wallace & Minchenberg, Fred Wallace, individually and as a member of Wallace & Minchenberg, and Alfred Minchenberg, individually and as a member of Wallace & Minchenberg (hereinafter the defendants), the attorneys who commenced the underlying personal injury action, committed legal malpractice by failing to properly prosecute the action.

Judicial Reports is more explicit: "Bennett A. Cohen kept getting hurt in elevators — or so he claimed. The lawyers he hired to exact compensation from the culprits responsible for the injuries he allegedly sustained in four elevator mishaps between 1989 and 1992 must have suspected that their litigious client might eventually turn on them, as he did. When the last of the elevator tort claims collapsed, Cohen sued the law firm for malpractice for allegedly mishandling his slam-dunk tort suits. Kings County Justice Lawrence Knipel apparently wasn’t in any hurry to unhitch the lawyers from the petard that they had theretofore been carrying on their former client’s behalf.

Knipel denied the lawyers' motion to dismiss Cohen’s claims against them, leaving it to the Appellate Division to put an end to it. A unanimous appellate panel concluded that the law firm, Wallace & Minchenberg, can’t be held accountable for failing to vigorously prosecute the personal injury actions because they had no chance of succeeding. The evidence they produced in support of Cohen’s claims stemming from the first three accidents failed to show that the elevator maintenance companies were aware of problems but let them go unfixed, the appellate judges observed, reversing Knipel and dismissing Cohen’s claims related to those cases.

Cohen’s malpractice claim stemming from the fourth alleged accident was filed against the law firm long after the three-year statute of limitations had expired. Knipel should have dismissed that claim on that account, the Appellate Division said. Cohen v. Wallace & Minchenberg (April 17) "

Try to figure out the tangled web in this land - real estate - develepoment - municipal case taking place in Texas. "The law firm of Godwin Pappas Ronquillo LLP, representing the City of Celina, filed a lawsuit on April 19 against the defendants Robert Brown and Brown and Hofmeister LLP.

In the lawsuit between Pilot Point and Celina regarding annexation of the Talley Ranch, Brown was representing the City of Pilot Point. In January of 2007, Judge Bruce McFarling disqualified Brown, Brown and Hofmeister LLP, and attorney Mark Goldstucker from the lawsuit due to conflicts of interest. In the lawsuit recently filed against Brown and his firm, Celina is holding Brown and Brown and Hofmeister LLP liable for legal malpractice.

“The lawyer that was negotiating with Talley Ranch on behalf of Pilot Point (Robert Brown) is the same lawyer that was helping Celina on their annexation,” said David LaBrec, Celina’s attorney in Celina v. Pilot Point. “My client felt as if it was a conflict for Mr. Brown, and I felt like it was a conflict. Celina moved to disqualify him, and that was very expensive. Now (Brown and Hofmeister LLP) have been disqualified, so we’re prepared to move forward with the litigation.”

The Court of Appeals decided two interesting legal malpractice cases today.  AmBase v. Davis Polk is one and Rudolph v. Shayne Dachs is the second. Rudolph is interesting on at least two counts.

In this case plaintiff was injured as a pedestrian.  Defendant law firm asked for the wrong jury instruction, and as a result plaintiff won, but was seriously hit with comparative liability.  He hired new counsel, got a new trial on the basis of the wrong jury instruction, and settled the case for about 15X the amount.

He sued in legal malpractice asking for two things:  the attorney fees to fix the first trial, with the repeat costs of the second trial [experts, etc].  On this he won.  The second thing he asked for was interest on the difference between the first recovery and the second recovery from the date of  trial 1.  On this he lost.

The decision is interesting for two items:  The Court of Appeals fleshed out what expenses may be recoverable "in an attempt to avoid, minimizev or reduce the damage caused by attorney wrongful conduct", citing DePinto v. Rosenthal & Curry and Baker v. Dorfman.

The court also left open what  and whether predecision interest may be recoverable in legal malpractice in its last footnote.

This case, in which DP represented AmBase Corp. involved litigation in a tax matter.  AmBase sued DP on the theory that it never owed taxes, and DP failed to represent it carefully.  Supreme Court, New York County dismissed the case, the AD 1 affirmed, the Court of Appeals granted leave to appeal, and then affirmed,  Joel Stashenko of Law Com writes:

"Davis Polk was retained in 1992 to represent AmBase in a dispute over about $20 million in federal withholding taxes the Internal Revenue Service sought from the company for 1979 through 1985. In May 2001, the U.S. Tax Court ruled that AmBase owed none of the money sought by the IRS.

Though it won the tax case, AmBase balked when Davis Polk submitted a bill for a $1,424,104 "success fee" that was provided for in the retainer agreement between the company and the firm. The fee was calculated at 150 percent of Davis Polk's billed time, subject to a $2 million cap. AmBase filed a legal malpractice claim and sought to have Davis Polk return previously paid legal fees.

It contended that Davis Polk should have informed the company sooner that it did not appear AmBase would be liable for any of the taxes sought by the IRS. AmBase argued that its financial condition was weakened, and its economic opportunities were limited, because it had to carry a large loss reserve for years on the possibility that it could lose the tax case.

Both Manhattan Supreme Court Justice Louis B. York and the Appellate Division, 1st Department, in AmBase Corporation v. Davis Polk & Wardwell, 30 A.D. 3d 171, 172 (2006), dismissed the complaint. Both lower courts, like the Court of Appeals on Thursday, found AmBase's contention that it suffered from the lack of earlier notice it was probably off the hook for the tax bill "purely speculative" and an insufficient basis for a legal malpractice claim.

In AmBase Corp. v. Davis Polk & Wardwell, 51, Judge Carmen Beauchamp Ciparick wrote Thursday that Davis Polk "exercised the ordinary reasonable skill and knowledge commonly possessed by a member of a legal profession" as established under McCoy v. Feinman, 99 N.Y. 2d 295, 301-302 (2002). "

From the W Va Record: "CHARLESTON - A Kanawha County attorney is being sued by his former clients who claim he failed to file their lawsuit within the statute of limitations period.

Dayton Price and Suzan Price named Stephen P. Swisher as defendant in a lawsuit filed April 11 in Kanawha Circuit Court.

The Prices were married at the time, but are currently separated.

According to the suit, Swisher was retained by the Prices after Dayton Price was in an accident at the Lowe's store in Nitro on April 15, 2003.

"Despite being cognizant of the date of Mr. Price's injury, (Swisher) failed to effectively preserve and/or pursue plaintiffs' underlying claims by filing a civil action for such claims within the applicable statute of limitations period," the suit states.

The Prices claims Swisher did not file the suit in an attempt to conceal or erase the error to further their detriment, the suit says.

From Law Com:

"Popular belief, at least in medical communities, holds that juries in medical malpractice cases tend to side with plaintiffs, even where the case against a doctor is a weak one.

But jurors actually tend to believe doctors more than they do plaintiffs, says a law professor who examined numerous data on medical malpractice litigation, including cases in New Jersey.

Philip Peters Jr., of the University of Missouri-Columbia School of Law, concluded that juries treat doctors favorably, "perhaps unfairly so," and are more likely than even fellow physicians to defer to a doctor's opinion.

Peters found that most malpractice suits end in defense verdicts, and that the cases that go to trial tend to be the weakest ones, since those with strong evidence usually settle before trial.

In an examination of win rates, Peters found that 27 percent to 30 percent of filed medical malpractice suits end in a plaintiff's verdict, the lowest success rate of any type of tort litigation.

Peters researched the data to test the assumption that juries lack capacity to evaluate medical malpractice suits fairly -- an assumption implicit in legislation pending in Congress that would create specialized courts for such cases.

"Politicians and critics of jury performance should think twice before concluding that doctors will be treated more favorably in health courts," wrote Peters, whose report will be published in May in the Michigan Law Review. "

Legal and medical malpractice share roots, histories and are both about professional shortcomings.  Do they share this attribute too?

The end of the relationship can come from any number of reasons, but the end is reached either before or at the end of the underlying litigation.

<strong>Termination by client</strong>

It is the general rule in the United States, and the rule in New York that an attorney's representation of a client may be terminated at any time by the client, either for good cause or for no cause. Analysis of a client's termination of the attorney's retention [hereinafter "termination"] starts with determination of whether the termination was for good cause or for no cause.

While the difference between "for cause, good cause, or cause" for termination and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which manifestly does not rise to the level of attorney malpractice.

<strong>Where the discharge is for
cause,the attorney has no
right to compensation</strong>

Where the discharge is for cause, the attorney has no right to compensation. This rule exists regardless of the terms of a retainer or other agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients.

Where the discharge is for cause, the attorney has no right to compensation or a retaining lien, regardless of pleading or stated defenses. "This rule is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential." "An attorney discharged for cause has no right to a fee or a retaining lien."

<strong>Where the discharge is without
cause, the attorney is limited
to recovering in quantum meruit</strong>

"When an attorney is discharged without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement." This rule, set forth by the Court of Appeals exists as a matter of law, whether pled or not, and whether set forth as an affirmative defense or not.

Where the discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services rendered. The courts clearly "possess the traditional authority to "supervise the charging of fees for legal services," pursuant to their "inherent and statutory power to regulate the practice of law."

<em>Quantum meruit</em> means "as much as he deserved, and is premised upon the finding of an implied promise to pay as much as he reasonable deserved." If it is determined that the termination was without cause, recovery should be determined to be an amount which "they reasonably deserved."

The Court of Appeals has found that where the discharge is without cause, as a matter of law, the attorney is limited to recovering the reasonable value of the services rendered, in quantum meruit.

"<strong>Cause" is not the
equivalent of "malpractice"</strong>

Good cause for termination is not the same as malpractice. Attorney malpractice, defined as a deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination.

<strong>"Termination for cause"</strong> has arisen in many situations in which malpractice was not even discussed, much less claimed. For example, substantial delays in prosecuting the case or failing to bring the action until 2 days before the statute of limitations is sufficient; failure timely to obtain medical records is similarly sufficient .

Failure to retain an expert is similarly sufficient . "Employment [which] contravenes specific legal requirements is sufficient, as is abandonment of a case, ; or a conflict of interest; a refusal personally to try a case ; or a failure to disclose a settlement offer are all these examples misconduct which resulted in termination for cause, with no fee to the attorney. They do not amount to malpractice, however.

Termination for cause threshold lies well below any question of malpractice. As an example, Dagny Management Corp.,supra, is instructive. Friction between the client and the attorney grew over the management of the settlement funds, in which the attorneys frustrated, but did not destroy, the settlement. The Appellate Division determined that the "firm's interference with the client's right to settle constitutes misconduct sufficient to rise to a level warranting discharge for cause and forfeiture of its fee", citing De Luccia v. Village of Monroe, 180 AD2d 897 [3d Dept, 1992]

The difference flows logically from the question of damages is that in malpractice there is a positive claim for damages, over and above fee considerations from attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. The heightened burden for malpractice logically accompanies the heightened possibility of damages.

It is the general rule in the United States, and New York that the client, either for good cause or for no cause, may terminate an attorney's representation at any time. While the difference between "for cause" and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which does not rise to the level of attorney malpractice.

Where the discharge is for cause, the attorney has no right to compensation, regardless of the agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients. Where the discharge is for cause, the attorney has no right to compensation or a retaining lien. When discharged without good cause, compensation is measured by the fair and reasonable value of the services rendered whether that is more or less than the amount provided in the contract or retainer agreement. The attorney is limited to recovering in <em>quantum meruit</em>.

The courts possess authority to supervise fees for legal services. Quantum meruit means, "as much as he deserved, premised upon an implied promise to pay as much as reasonable. Put in short, quantum meruit is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement. It is determined by taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility, the amount or value involved, the length of time spent, the ability, skill and experience required, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed or the original terms of the retainer agreement, and may be less or more than the amount, which might have been recovered under a contingency fee.

Attorney malpractice arises in matrimonial settings too. In another recent successful case, Plaintiff -wife had a history of suicide attempts, which were one of the bases of husband's claim of cruel and inhuman treatment. Plaintiff had a history of psychiatric hospitalizations. Days after her release, her attorney and she attended a court hearing on custody, which turned into a settlement of the entire divorce. At the time, she was still on psychotropic medication, and only days out of the in-patient hospitalization. This attorney malpractice matter was settled for $350,000.

Attorney malpractice case arise in unexpected circumstances and may be more vital and valuable than expected. Analysis of the four elements of attorney malpractice is required to determine whether a case exists, and may successfully be prosecuted. As always, the elements are: professional relationship, deviation, proximate cause [including the "but for" element,] and damages.

The City of New York, the Health & Hosptials Corporation, individual hospitals.  The ownership and place of service of a summons and complaint, as well as a notice of medical malpractice have long been a trap for the unwary.

NOTE:  The New York Law Journal reports that "starting April 30, 2007 service of process and notice of claims must be filed in Room 650 at 346 Broadway at the new HHC Office of Legal Affairs Medical Litigation Unit."

Don't serve the notice or the summons in the wrong place!

Here is a Florida case whcih discusses the obligation between attorneys on a fee split, and the difference between an attorney split and a fee owed by the client.  Here, attorney 1 referred the case to attorney 2, and was then terminated.  Result?  Attorney 2 owes a specific percentage to Attorney 1.

"An appellate court has ruled that two Miami lawyers should split a contingency fee award based on their written fee agreement -- even though one lawyer was fired by the client on the advice of the other lawyer before the case was won.

A 4th District Court of Appeal panel unanimously ruled April 2 that Scott Jay, who referred a legal malpractice case to Warren Trazenfeld, is entitled to 25 percent of the $218,000 fee Trazenfeld won as part of a $485,000 judgment in Broward Circuit Court in 2003.

Trazenfeld had argued that Jay was not entitled to any fees because he thought that when his client terminated Jay, the fee agreement was voided. Jay's only claim, he said, was based on quantum meruit, meaning that payment should be based on the reasonable value of services provided. But Jay was not even entitled to that, Trazenfeld said, because Jay had not kept complete time records of his work.

Broward Circuit Judge Robert Lance Andrews agreed with Trazenfeld. But the 4th DCA panel rejected that argument. First, it said case precedent holds that the quantum meruit rule was inapplicable because it applies to the client's obligation, not to co-counsel's obligation.

"The written fee agreement provides that co-counsel are jointly owed the fee," the panel wrote. "And because the contract did not specify otherwise, the division of the fee would ordinarily be equal."

The panel also rejected Trazenfeld's argument about the time records.

"Here, where the fee agreement effectually makes the division, it would serve no purpose to keep such records to establish the share of each," the panel wrote. "In this kind of joint representation, counsel may recognize from the beginning of their undertaking that the amount of time spent by either will not control the division. … As long as such a division is not unreasonable and does not violate the regulatory rules of the Florida Bar, there is no good reason why courts should resort to time records to divide the fee."

Read this:

"After a Preston Hollow, Texas, neighbor complained that his son's pet donkey was a loud nuisance, Dallas lawyer C. Gregory Shamoun brought the donkey, known as Buddy, into a courtroom on Wednesday to attempt to prove to a jury that the burro's not. When the suit went to trial on Wednesday, Buddy was the first witness.

Although Buddy clearly couldn't testify, Shamoun says he wanted the jury to see that Buddy is his 7-year-old son's well-behaved pet.

Cantrell's attorney, Chandler, confirms that Buddy wasn't noisy in the courtroom.

"The donkey did behave. It was a nice donkey, as donkeys go, I suppose," says Chandler, of Chandler & Chandler in Dallas.

Seider says he allowed Buddy to appear in court as a witness, because Cantrell had pleaded in his counterclaim that Buddy was a nuisance.

"He behaved perfectly. They led him in, and the jury observed him for a minute or two, and then he went peaceably away," Seider says, adding that Shamoun assured him that if Buddy made a mess in the courtroom, he would clean it up. "

Here is a legal malpractice case in which it is alleged that defendant attorney spoke with the upcoming judge at at coctail party, and was told that the judge would let plaintiff have only 5 days of trial.  As a result, it is alleged that plaintiff settled the case rather than try it in so short a period?

Unthinkable?  "Four years after Cox Smith Matthews settled a suit on behalf of plaintiff Total Clean LLC for $4.5 million, the firm is defending itself in a case brought by its former client. Total Clean, a family business established to operate a truck wash, has sued the San Antonio-based firm and one of its shareholders in Bexar County, Texas' 37th District Court. At a mediation held five days before the trial, McElhaney allegedly told Nami family members "that they had to settle the case because they could not effectively go to trial with the five-day trial limitation," according to the petition. "Believing McElhaney that the federal judge would permit Total Clean to put on only a small part of its case, and therefore essentially prevent it from effectively putting on its case, the family agreed to settle. ... "

"We are alleging that the lawyer [McElhaney] told the client that the judge said he would only permit a very short trial and that is why [the client] settled," says Smoot. "My client is adamant. He [Bobby Nami] would not have settled except for the fact that he was told he would only have a five-day trial."

If you think that this is a unique case, take a look at Totura v. Sullivan Papain Block now before the AD2, AD No. 2006-3886  fully briefed.  The allegation there is that the attorney told his client the judge spoke at a bar meeting and told him to settle or face dismissal at trial.

This case falls in the "just can''t explain it" category.

Attorney represents plaintiff and obviously had problems.  Client sues attorney in legal malpractice, and attorney defaults on trial.  He then defaults on inquest of which he had notice.  He then fails to do anything about a settled judgment.

Only after entry of judgment does he try to vacate.  His efforts unsuccesful.  "After the defendant failed to appear on the scheduled trial date, he was notified that the case would be placed on the calendar one week later for an inquest on damages. Moreover, after the defendant's efforts to vacate his defaults proved unsuccessful, he was given notice, on or about April 13, 2004, that judgment would be entered against him on or after May 1, 2004. Under these circumstances, the defendant has no grounds to complain of lack of notice pursuant to CPLR 3215(g)(1).

Finally, the court properly determined that the judgment was not entered in violation of 22 NYCRR 202.48(a) (see Funk v Barry, 89 NY2d 364). "

Here is a reported case in which the case against defendant was dismissed after openings.  This occurrence is rare, rare, rare.  Worse yet, plaintiff suffered complete dismissal at the end of plaintiff's case.  What was counsel doing and thinking??

"Plaintiff's opening statement failed to make out a prima facie case of negligence against the driver of the car involved in the alleged accident. Therefore, there could have been no finding of liability against the car's owner, defendant Diaz, since any liability on his part would have been derivative of the driver's (Vehicle and Traffic Law § 388[1]). Accordingly, the court properly dismissed the action as against Diaz immediately after opening statements (see Giroux v Snedecor, 178 AD2d 802 [1991]).

The complaint against the City was properly dismissed at the close of evidence. Even if the City created the bump to which plaintiff attributes the accident in which he was injured, there was no competent evidence that the bump was hazardous at the time of its creation (see Bielecki v City of New York, 14 AD3d 301 [2005]). The trial court properly precluded the testimony of plaintiff's expert, since there was no showing that the proposed testimony would clarify an issue [*2]involving professional or technical knowledge beyond the ken of the typical juror (see GMAC Commercial Credit v Mitchell-B.J. Ltd., 272 AD2d 51 [2000]).

Plaintiff in this personal injury action litigated it correctly right up to trial.  However, it then fell completely apart.  Trial attorney hired about a week prior to trial, and was not exactly ready.  Request for an adjournment denied, case dismissed.  The decision places the fault squarely with plaintiff's attorney.  Is this Legal Malpractice?

"Whether to grant an adjournment is a matter within the discretion of the trial court (see Matter of Steven B., 6 NY3d 888, 889 [2006]). Although there is no indication of delay by plaintiff in the litigation of this matter until the day of trial, it remains that neither plaintiff's counsel of record nor plaintiff's newly retained trial counsel provided the court or the defense with advance notice of plaintiff's purported inability to proceed to trial on the appointed date, and instead, submitted, on the day of the scheduled trial, an affidavit of engagement that admittedly contained misstatements of fact. Not only did plaintiff's counsel of record act contrary to the mandate of 22 NYCRR § 202.31 by retaining outside trial counsel fewer than 10 days before the trial was to begin, but the attorney retained was clearly not prepared to try the matter on the scheduled date. In view of counsel's noncompliance with 22 NYCRR § 202.31 and the trial attorney's false representations to the court, we cannot say that the trial court improvidently exercised its discretion in denying plaintiff an adjournment and, when plaintiff refused to proceed, dismissing the action for failure to prosecute"

This case illustrates two things:  real estate leases in commercial transactions can have great consequences, and, a contract cause of action for legal malpractice can succeed hugely.

"A lawyer who is now with Montgomery McCracken Walker & Rhoads was hit with a legal malpractice verdict of more than $6.6 million in a suit brought against her and her former firm by a corporate real estate client that said her poor drafting of a lease agreement sparked a lawsuit in California that cost $4 million to settle.

In his verdict from a nonjury trial, Judge Mark I. Bernstein of Philadelphia's Commerce Court ruled that attorney Karen Senser and Segre & Senser must reimburse Crown Cork & Seal the $4 million it paid to settle the California suit, as well as more than $972,000 in attorney fees and $1.6 million in interest.

Bernstein's one-page ruling included no discussion of the case, but simply announced his verdict and damages awards totaling $6,643,054.

Crown had initially filed suit against both Senser and her partner, Nina Segre, as well as Montgomery McCracken. But in pretrial rulings, 1st Judicial District President Judge C. Darnell Jones II dismissed Segre from the suit and ruled that all claims against Montgomery McCracken were barred on statute of limitations grounds. Jones also dismissed all claims of breach of fiduciary duty and negligence-based malpractice claims.

As a result, the case went to trial only on a contract-based malpractice claim against Senser and her former firm.

Our Outside Counsel column in today's NYLJ is on "The Defense of Collectibility in Legal Malpractice"

Here is a portion.  For the entire article, see today's NYLJ:

The Defense of 'Collectibility' in Legal Malpractice

By Andrew Lavoott Bluestone
New York Law Journal
April 20, 2007

One of the many wrinkles in legal malpractice, which in some ways is a body of law unto itself, is the defense of collectibilty.

Simply put, it is the defense that even if successful, plaintiff might not have been able to collect a hypothetical judgment from the defendant. In no other field of law is plaintiff required to prove that collection can be had at the end of litigation. Pyrrhic victories are elsewhere permitted, and plaintiffs often face uncertainty of reward in other fields of law.

There is a split between departments in New York over who bears the burden of proving collectibilty or noncollectibilty. This article will describe the issue and the split.

In order to establish a prima facie case of legal malpractice, it must be shown that the defendant attorney deviated from good and accepted practice ["failed to exercise the degree of skill commonly exercised by an ordinary member of the legal community"] and that plaintiff-client sustained actual, real, measurable damages as a proximate result of the deviations by the defendant attorney.

Hinshaw writes today about a federal worker's compensation attorney fee issue which applies to all attorney fee disputes:  block billing and 1/4 hour minimum billing, both of which led to a reduction by the court:

"Brief Summary
The Ninth Circuit reviewed the guidelines applicable to court-awarded attorney fees in ERISA litigation. Among other things, the court upheld a 20 percent reduction based on the attorney’s block billing and a 20 percent reduction based on the attorney’s use of quarter-hour minimum billing segments. On the other hand, the court held that it is appropriate for a fee award to include consideration of the attorney’s delay in receipt of fees. More generally, the court held that the appropriate hourly rate must be one that is charged, on an hourly basis, by equivalently skilled practitioners and that the time spent on various litigation-related activities must not be excessive. "

Not legal malpractice, but about legal fees.

Associate intercepts calls, moves clients around, takes away business, indicted, convicted, jailed.

Now, the litigation is about lost clients.  Here is the Appellate Decision.

the NYLJ today reports:

"The New York State Commission on Judicial Conduct voted Tuesday to curb the responsibilities of its chairman, celebrity divorce lawyer Raoul Felder.

The vote came in the wake of Friday's "no confidence" vote in Felder because of what the commission described as the "racial, ethnic and religious invective" in "Schmucks!" a book he co-wrote with comic Jackie Mason.

Felder did not attend the meeting. The resolution, which was adopted without dissent, withdrew from Felder the authority to serve as the body's spokesman.

In another move aimed at Felder, the commission said it is changing its prior practice of allowing any of its 11 members to sign non-public letters of caution issued to judges.

"Until further notice," the resolution states, all of the commissioners, "other than the chair," shall have the authority to sign the letters.

In an interview Wednesday, Felder disputed the commission's factual premise, saying the past practice had been for only the commissioner to sign the letters. The body was acting, he said, out of a "hysterical" concern that he would refuse to sign the letters.

Felder agreed that the commission's administrator, Robert Tembeckjian, should alone handle dealings with the media, and noted that he had deferred to Tembeckjian since becoming chairman last June.

Tembeckjian said Wednesday that the commission continues to examine whether it has the authority to remove Felder as chairman.

Cassandra Crottyreports in the Illinois Legal Malpractice Blog that:

"Insurer Able To Proceed With Legal Malpratice Lawsuit
An Illinois appellate court recently reversed a circuit court entry of summary judgment in favor of a lawyer and his Park Ridge law firm, holding that an insurance company can proceed with its legal malpractice lawsuit against the law firm that represented the insurer in connection with a coverage dispute. The appellate court found that the "defendants failed to meet their burden of production on their motion for summary judgment because they did not present evidence that, left unrebutted, would entitle them to judgment as a matter of law or demonstrate that the [insurer] would be unable to prove any element of its cause of action."

The case-within-a case stemmed from a car accident that occurred in 1991. The insurer, Universal Underwriters Insurance Co., had issued an insurance policy to Carriage Chevrolet Inc., a car dealership in St. Louis. Michele Heflin, a Carriage Chevrolet salesperson, was driving a car owned by the dealership when she pulled over to help a driver with a disabled vehicle on the side of the road. While Heflin was rendering assistance, another car struck and injured her. Heflin filed suit against the driver and received $25,000 - the limit of the driver's policy. Heflin then turned to the Universal umbrella policy issued to her employer, Carriage Chevrolet, arguing that it provided under-insured motorist coverage. When Universal denied her claim, Heflin then filed a declaratory judgment suit asking the court to determine and adjudicate the rights and liabilities of the parties with respect to the umbrella policy. Universal then hired the defendants in this action, Jay Judge and his law firm, Judge & James, to defend it in the dec action. 1n 2001, after litigating the action (in court and in arbitration), the trial court entered an order requiring Universal to pay $2,975,000 plus interest, and two weeks later, Universal, through new counsel, settled Heflin's claim for $3 million.

Universal then filed this legal malpractice suit against it's former lawyers. In its amended complaint, Universal contended that the lawyers owed it a duty of care, which included the obligation to take timely appeals and to timely seek other remedies in the event of adverse and erroneous judgments. Additionally, Universal contended that the lawyers breached their duties by failing to raise the $1 million umbrella policy limit as a defense or limitation on damages in the arbitration proceeding"

Here is a newspaper article recounting the story of a rape-security trial at which the attorney failed to show.  Legal malpracitce and a roller coaster of dismissal, reversal, affirmance followed.

"The state Supreme Court declined Wednesday to hear a case in which a state appeals court ruled an Escondido rape victim can sue two civil attorneys for alleged legal malpractice.

The court's decision leaves in place the January appeals court ruling that said the lawsuit against the attorneys, Mark Kelegian and Thomas Morgan, can proceed.

The attorneys represented the woman when she sued the landlord of the apartment complex where she was raped for allegedly failing to provide sufficient security at the property. Kelegian did not show up for the trial of that lawsuit, and the woman learned the case already had been dismissed, the appeals court ruling stated."

Plaintiff loses on appeal in this legal malpractice case.  Injured in a casino after slipping and falling in vomit, the attorney sent a claim letter but  did nothing further, the statute of limitations then running out.  AD:  no proof of notice to the casino, and legal malpractice case must be dismissed.

"The issue in this legal malpractice action is whether plaintiff established that "but for" the negligence of defendants in failing to timely commence a personal injury action on her behalf, she would have prevailed in that litigation. On July 4, 2002, plaintiff was walking through the lobby of the Trump Taj Mahal Casino Resort in Atlantic City when she slipped on a substance she identified as vomit. Plaintiff did not see any substance on the floor prior to her fall. She alleges that after she fell, a woman dressed in a blazer and holding a walkie-talkie, whom she believed to be a security guard, came over and told her to get up. When she tried to get up unassisted, she allegedly fell again in the vomit

"After depositions, defendants filed a "renewed" motion for summary judgment, this time relying on plaintiff's deposition testimony, where she again admitted that she had no information regarding how long the dangerous condition existed. Defendant Kuczinski also noted that during each of his discussions with plaintiff about the case, she never mentioned any "second" fall. Plaintiff responded that she should not be penalized for her inability to prove notice in the underlying action, since that inability was solely the product of defendants' negligence in failing to investigate the case and timely commence an action. According to plaintiff, had a formal action been timely commenced, she would have obtained the names of crucial witnesses, such as the security guard, as well as any surveillance videotapes kept by the casino, in routine pre-trial discovery proceedings. In addition, plaintiff argued that actual or constructive notice could be inferred in the underlying action, given the vomit's proximity to the lobby desk and bell boy station.

On appeal this legal malpractice arising from a medical malpractice case reated a partial reversal after suffering dismissal in Supreme Court.  The attorney who was defended by Kaufman Borgeest Ryan attorney Michael Furman won his appeal.  Attorney Mondora, representing himself, lost, and had his dismissal reversed.  A pyrrhic victory against a pro-se uninsured attorney??

They say that this med mal case closed down an organ transplant hospital program in LA.  Doctors were rejecting viable organs and keeping transplant paitients waiting.  Plaintiff successfully sued, then learned more.

"A state appeals court has resurrected the malpractice lawsuit that helped shut down UCI Medical Center's troubled liver transplant program.

A lower-court judge threw out the case two years ago on grounds that plaintiff Elodie Irvine had agreed to a $50,000 settlement from the hospital.

Irvine, who had deadly kidney and liver disorders, spent four years on UCI's organ transplant waiting list before transferring to another hospital and getting the procedures done within two months.

She sued UCI in 2004 for negligence and fraud. A year later, she signed an agreement to settle the case for $50,000. But before the check arrived, she found out the Orange hospital had rejected 38 livers and 57 kidneys available to her through a national organ clearinghouse. "

She refused to cash the $50,000 check and asked a judge to overturn the settlement. The judge denied her request.

Irvine, of Irvine, appealed that ruling and scored a victory Monday when a four-judge panel for the 4th District Court of Appeal said Orange County Superior Court Judge Randell Wilkinson had erred when he rejected her motion to overturn the settlement agreement.

In reinstating Irvine's case, the appeals court didn't evaluate the merits of her cla

This short news article tells us that this law firm has a lot of legal malpractice litigation going on around it.

"An Augusta attorney and his former law firm claim they are justified in withholding certain information from a former client who is suing them.

Monday was the deadline for William Fleming, John Fleming and The Fleming firm to respond to a motion filed by Wendell A. Jenifer's new attorneys.

Mr. Jenifer alleges the Fleming attorneys were negligent and cost him a chance of receiving compensation for a 1999 injury.

The federal lawsuit against the Fleming attorneys was filed last year. Last month Mr. Jenifer filed motions asking the court to force the Fleming attorneys to turn over certain information.

Mr. Jenifer's attorney complained to the court that the Fleming attorneys were holding back information about 22 other malpractice claims that were filed with the Fleming firm's insurance company in 2002.

We're proud to present our 1000th story here on the New York Atorney Malpractice Blog. 

Thanks for reading and staying with us for Legal Malpractice News and cases.

Attorney attendence at trials and conferences is a big source of legal malpractice troubles.  Here is a case from Brooklyn:

Diamond v. Diamante, 27030/03
Decided: March 22, 2007

Justice Diana A. Johnson

KINGS COUNTY
Supreme Court

"On the trial adjourn date of November 15, 2006, plaintiff Claudia Diamond and her attorney James D. Reddy failed to appear. Plaintiff Sheldon Diamond, the husband of Claudia Diamond, appeared and related that Mr. Reddy had told him the day before that he would be unable to be in court, that he had two other cases on Long Island, and to ask for an adjournment. Mr. Diamond was not given an affirmation of engagement to present to the Court by Mr. Reddy.

Mr. Grossman moved to dismiss the action with prejudice. In response Mr. Diamond stated that his wife should not be punished for Mr. Reddy's actions, that hiring him had been a terrible mistake, and that his wife was sick and she should have an opportunity to have justice served. The court clerk indicated that Mr. Reddy had called the day before seeking an adjournment claiming his client Claudia Diamond was sick.

On consideration of the attendant circumstances the Court finds Mr. Reddy failure to appear on November 15, 2006 was without good cause. The Court is cognizant of the fact that Mr. Reddy is a solo practitioner and is loath to impose sanctions. In consequence the Court sought to avoid having the hearing and encouraged Mr. Reddy to settle the costs matter with Mr. Grossman and Ms. Punzone. The Court indicated if a settlement was made, the Court would consider the matter closed regarding his nonappearance on November 15, 2006 and not proceed with the sanctions hearing. However, Mr. Reddy insisted in the correctness of his actions and that he had been entitled to an adjournment under Part 125. Mr. Reddy has totally misconstrued the function of Part 125 which is to delineate and provide the criteria upon which an attorney may obtain an adjournment based on being otherwise engaged. This is in recognition of the fact that at times the responsibilities of competing cases may cause an attorney through no fault of his/her own to have conflicting engagements. Its purpose is to set up priorities when such conflicts arise, not to create a way for an attorney to extricate himself from a scheduled trial date he is aware of, by setting up a conflict and then using the conflicting engagement as the excuse for not appearing when the other side will not consent to an adjournment. No less than his own affirmation of engagement establishes that his failure to appear was self-created and avoidable. As stated at paragraph 13, "[b]ased on the reported illness of the plaintiff Claudia Diamond by her husband and the inability to continue her testimony on November 15, 2006, I seized the opportunity to seek a temporary restraining order . . . ." (emphasis added). Mr. Reddy's explanation for not appearing is without merit and is inexcusable. Accordingly the Court finds based on the testimony elicited at the hearing that the reasonable amount of costs incurred by Ms. Punzone due to her appearance on November 15, 2006 to be $129.00; and the reasonable amount of costs incurred by Mr. Grossman to be $500.00. The Court further imposes upon Mr. Reddy sanctions pursuant to Subpart 130-2 in the sum of one thousand dollars ( $1000.00) to be deposited with the Lawyers' Fund for Client Protection. Judgment is granted against Mr. Reddy accordingly.

This NJ case was was "dismissed on the ground that plaintiff had voluntarily settled the underlying case without exhausting its appeal and separate active lawsuits, and thus was precluded as a matter of law from attempting to recoup the difference in the malpractice action against defendant. We reverse and remand. " wrote the SUPERIOR COURT OF NEW JERSEY,APPELLATE DIVISION ,
DOCKET NO. A-2991-05T52991-05T5 .

"We are persuaded by many of plaintiff's arguments and are satisfied the complaint should not have been dismissed on summary judgment. This case is factually and legally distinguishable from Puder and does not have the "fairness and the public policy [considerations] favoring settlements" or the equities that pervaded that case. Plaintiff's principal never represented to anyone, let alone a court, that its settlement with the nursing homes was a "fair" and satisfactory resolution of its underlying claims. Nor by now suing Squitieri for malpractice is plaintiff seeking to profit from litigation positions that are "clearly inconsistent and uttered to obtain judicial advantage." Puder, supra, 183 N.J. at 444 (quoting Newell v. Hudson, 376 N.J. Super. 29, 46 (App. Div. 2005)). Moreover, plaintiff did not settle the underlying suit with the nursing homes prior to the trial court ruling on its motion to amend the complaint to assert the omitted Medicare-denied claims. That plaintiff chose to take the further steps and appeal the trial court's denial of its motion to amend and to file the subsequent lawsuits to preserve the statute of limitations on its underlying claims, and thereafter decided, for a variety of reasons, to settle with the nursing homes prior to obtaining judicial determinations did not, under the circumstances of this case, preclude plaintiff's malpractice claim as a matter of law.

The trial court should have evaluated whether plaintiff took reasonable steps, from plaintiff's point of view, to remedy Squitieri's alleged negligence before pursuing its malpractice action, which presented factual issues that could not be decided on this record on summary judgment. Instead, the court erroneously assumed as a matter of law under Puder that by filing the appeal and subsequent lawsuits, plaintiff had other forums in which to pursue its underlying claims, which it voluntarily chose not to pursue, and thus it was estopped from now proceeding against Squitieri. Moreover, the record does not support the court's finding as to the viability of the two Law Division actions. On the contrary, we are satisfied there was credible evidence the complaints would not withstand Dellridge nursing home's May 2003, dismissal motion. There was also an insufficient basis for the court's finding on summary judgment that plaintiff had a good chance of success on its appeal. We do not believe the case law is as clear-cut as stated by the court. Expert testimony will most likely be required to assist the jury to determine the merits of plaintiff's appeal of the underlying case and the potential for reversal of the motion judge's denial of leave to amend the complaint, as well as the merits of the nursing home's cross-appeal of the jury verdict. Furthermore, in assessing the reasonableness of plaintiff's actions, the jury will also need to analyze all of the considerations that entered into plaintiff's decision to settle the underlying case and dismiss the appeal, including the amount of the settlement.

We reverse the summary judgment dismissal of plaintiff's malpractice complaint and remand for further proceedings. Plaintiff will proceed to prove Squitieri's malpractice by way of the suit-within-a-suit or other appropriate format. Garcia v. Kozlov, Seaton, Romanini, & Brooks, P.C., 179 N.J. 343, 358 (2004). Defendant has the right to assert, among its other defenses, that it was unreasonable for plaintiff to settle the underlying case and dismiss the appeal, including that the amount of the settlement was unreasonable. "

We had not heard of this particular branch of legal malpractice before, but upon examination, it is a classic.  Equity-stripping foreclosure  fraud legal malpractice.  Here's the basic outline:  homeowner gets in financial trouble, faces foreclosure.  Group, including lawyers comes in, induces the homeowner to transfer ownership to avoid foreclosure.  Group gets a new mortgage, re-sells through their superior ability/knowledge and disposesses the homeowner.  

No surprise, there is a web site devoted to this particular problem. Read on.  Q:  How did they get these big-law firms to represent them????

"A foreclosure rescue lawsuit brought by a couple in a Brooklyn, New York Federal Court was settled privately by the parties involved earlier this year. The homeowners in this case brought suit against foreclosure rescue operator Principle Investors Realty, and individuals Frankie L. Freeman, Edith A. Lorick, attorneys Fred D. Way, III (remember him from yesterday's posts) and Appolo Pitton, and Kevin Waite, who ultimately ended up with the title to the home. When the homeowners approached the operators for help in "saving" their home, they (the foreclosure rescue operator) allegedly proceeded to engage in an equity stripping, foreclosure rescue deal that ultimately forced the homeowners out of their home. According to the allegations contained in the lawsuit:

"But instead of helping the Hineses save their home, Freeman induced them to transfer their deed to his associate, defendant Edith A. Lorick ("Lorick"), who took out a new mortgage on the property that exceeded the Hines's previous mortgage by more than $100,000; distributed the proceeds of the new mortgage to himself and his co-conspirators; and demanded monthly rental payments from the Hineses that he knew they could not afford. Unable to make the payments, the Hineses were forced to move out of their home."
According to the lawsuit, the property was ultimately sold for $100,000 more than the amount of the subsequent mortgage taken out by Lorick, and nearly $200,000 more than the payoff amount on the homeowners' original mortgage. The homeowners allegedly only received $10,000 in the transaction.

This lawsuit brought claims (not unlike many of the claims brought in those New York cases I reported on in yesterday's posts) against those involved for:

Equitable Mortgage (NY Real Property Law Sec. 320),
Violations of the Federal Truth In Lending Act,
Violations of the Federal Real Estate Settlement Procedures Act,
Common law fraud,
Conspiracy to commit fraud,
Violations of New York State General Business Law Sections 349 & 350 ("The Deceptive Practices Act"),
Conversion,
Unjust Enrichment and Constructive Trust,
Legal Malpractice
Representing the homeowners in this case were attorneys from the firms Chadbourne & Parke, LLP and Patterson Belknap Webb & Tyler LLP. 

"

Federal judge on Friday declined to dismiss a challenge to the constitutionality of New York state's new rules on attorney advertising.

Northern District Judge Frederick J. Scullin Jr., sitting in Syracuse, set June 18 for the beginning of a trial on the constitutionality of the state's new guidelines on attorney advertising.

The new rules, adopted by the presiding justices of the four Appellate Divisions, went into effect Feb. 1. They are being challenged by the personal injury firm Alexander & Catalano of Syracuse and Rochester, that firm's co-founder James L. Alexander and Public Citizen Inc., a Washington, D.C.-based advocacy group founded by Ralph Nader in 1971.

After a hearing, Judge Scullin denied the state's motion to dismiss in Alexander v. Cahill, 5:07-CV-00117. Ruling from the bench, he also reserved judgment on the plaintiff's motion for a preliminary injunction against enforcement of the rules and told the parties to prepare for an expedited trial.

"It is a great victory for us because it will allow us to get a final determination of the constitutionality of these rules pretty quickly," Gregory A. Beck of the Public Citizen Litigation Group who argued Friday for Public Citizen and the Alexander & Catalano firm said in an interview. "Every day that goes by is another day that those First Amendment rights are being violated."

This headline caught my attention:

"The New York State Commission on Judicial Conduct has voted "no confidence" in its chairman, matrimonial lawyer Raoul Felder, because of the inflammatory nature of a book, entitled "Schmucks!" he wrote with comedian Jackie Mason.

The agency's 10 commissioners - all but Mr. Felder - were unanimous in expressing their loss of confidence. Mr. Felder did not participate in the deliberations.

In a statement issued Friday, the commission said "we are exploring our options in terms of removing [Mr. Felder] as chair"

One of the lessons to learn in litigation is: "stick to what you know."  Woe to the first time practitioner who takes on a new area of law.  Here is an example of an attorney who did not realize that almost all insurance policies have a short statute of limitations.  The policy called for one year, the CPLR granted a minimum of two years, but unfortunately, the attorney thought it was a 6 year contract statute. 

"In September 1996, plaintiff retained defendant to represent her in connection with a hazard insurance claim for damages caused to her residence and place of business in a December 1995 fire. The parties were unable to reach a settlement and defendant commenced an action on plaintiff's behalf against the insurer, among others, in February 2000. Supreme Court (Rumsey, J.) granted the insurer's motion to dismiss on the ground that the action had not been commenced within the insurance policy's two-year statute of limitations, and this Court affirmed (Bergin v Quincy Mut. Fire Ins. Co., 289 AD2d 661 [2001]). In this action, plaintiff claims that defendant's failure to timely commence the underlying action against the insurer constituted legal malpractice. She appeals from the denial of her motion for partial summary judgment on the issue of defendant's negligence, and we now reverse.

Defendant does not dispute that the insurance policy contained a [*2]provision limiting the time to commence suit to one year and that the provision was properly construed to conform to the two-year statutory minimum period (see Insurance Law § 3103 [a]; § 3404 [e]). Rather, he asserts that he believed that the six-year limitations period for contractual claims applied (see CPLR 213), was not aware of the potential for a contractual statute of limitations being incorporated within the policy itself and learned of the two-year contractual limitations period only upon service of the insurer's answer. In our view, however, inasmuch as the insurance policy indisputably set forth a shortened statute of limitations and defendant admittedly failed to commence an action within the applicable time frame provided by statute, his conduct "fell below the ordinary and reasonable skill and knowledge commonly possessed in the legal profession," and constituted negligence as a matter of law (A.H. Harris & Sons v Burke, Cavalier, Lindy & Engel, 202 AD2d 929, 930 [1994]; see Deitz v Kelleher & Flink, supra at 945; see also Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511, 514 [1990], lv dismissed 77 NY2d 940 [1991]; Shaughnessy v Baron, 151 AD2d 561, 562 [1989]; see generally Jones Lang Wootton USA v LeBoeuf, Lamb, Greene & MacRae, 243 AD2d 168, 175 [1998], lv dismissed 92 NY2d 962 [1998]). Accordingly, we reject defendant's argument that there is a question of fact under these circumstances and conclude that plaintiff is entitled to summary judgment on the issue of whether defendant was negligent in failing to properly commence her action against the insurer (see Williams v Kublick, 302 AD2d 961, 961-962 [2003]; Stanksi v Ezersky, 210 AD2d 186, 186 [1994]). "

"A soon-to-be-released study by the American Bar Association shows that the number of legal malpractice suits lodged against "white shoe" firms has risen dramatically since 1996. While the case volume is still small, this study represents a costly, long-term problem for large corporate law firms." As the Cuban & Reyes blog tells us:

"In the recent ABA study released to Legal Times last week which compared two four-year periods, 1996 to 1999 and 2000 to 2003, the ABA found that legal malpractice cases of $2 million or more jumped 60 percent. The growing severity of claims stems in part from the major corporate scandals of the past five years, which have opened law firms up to new liabilities, insurers and law firm managers say the fallout goes beyond some of the biggest headlines"

Here's a report from the NY Lawyer:

"In Country Star's Divorce, Her Ex Sues Her lawyer, Her Maid Sues Everyone and the Beat Goes On

New York Lawyer
April 13, 2007

By The Associated Press

NASHVILLE, Tenn. -- The husband of country singer Sara Evans is suing one of his wife's divorce attorneys and his firm, alleging the attorney slandered and libeled him with untrue allegations of adultery.

Craig Schelske filed the $20 million lawsuit against Nashville lawyer John Hollins Sr. on Wednesday in Davidson County Circuit Court.

He contends that Hollins made false statements to the media.

"He (Schelske) was quoted in the press as saying he hadn't done anything wrong and he wanted everybody to pray for Sara," the lawsuit says Hollins told People magazine. "Let me tell you what, everything we allege, we've got photographs to back up the allegations of the complaint."

The lawsuit states that Hollins knew the statement was false and "knew that no photographs existed which depicted the plaintiff engaged in any type of illicit or adulterous activity," Schelske said in the court filing.

Schelske is asking that Hollins pay $10 million in compensatory and punitive damages. He also wants the firm of Hollins, Wagster, Yarbrough, Weatherly & Raybin to pay $10 million, as well.

Both Hollins and Schelske's attorney, Brad Lampley, declined comment Thursday, citing a gag order for both parties in the case.

The lawsuit is the latest development in the bitter divorce between Evans and Schelske.

The singer's former nanny, Alison Clinton Lee, filed a $3 million lawsuit on Tuesday against Evans, Hollins, John Hollins Jr. and their law firm claiming she was a victim of "slanderous and libelous" statements in Evans' October 2006 divorce filing.

In the filing, Evans claimed that the nanny had an affair with her husband, which both the nanny and Schelske deny. Schelske later responded that Evans filed for divorce the same day he discovered she was having an extramarital affair.

Schelske, who ran unsuccessfully for the Republican nomination for the U.S. House in Oregon's 5th District in 2002, has denied the allegations. "

Here is an interesting re-cap of the issues:

"There seems to be more confusion than there should be over causes of action against lawyers for breach of fiduciary duty. A recent complaint (Download irell0409.pdf) by Charter Communications against Irell & Manella exemplifies the tendency of malpractice plaintiffs to plead breach of fiduciary duty claims as well, based on much the same conduct and claiming the same damages.

A recent opinion requiring the Wilson, Elser firm to disgorge over over $3 million in fees (see story here) pointed me to a very fine article on the subject by Chuck Wolfram. I largely agree with what I see as his conclusion--that courts should not recognize as independent causes of action breach of fiduciary duty claims that do no more than re-hash malpractice claims, seeking the same relief based on the same facts--though I think of it in a slightly different way. (NY and Illinois courts follow this approach; California does not, so far as I know). "

These loses are from stolen money, not legal malpracitce.  The numbers are huge:  in the millions.

The NYLJ reports: "Dishonest attorneys prompted the awarding of $7.1 million in 2006 from the Lawyers' Fund for Client Protection, which warned yesterday that the fund is likely to start seeing claims from the largest case of lawyer theft in its 25-year history.

Last year, the fund paid out $1 million less than the $8.1 million awarded in 2005. The average awarded annually over the last five years has been just over $6.3 million. (The report is available at www.nylawfund.org.)

See the 2006 Annual Report and highlights from the report.

Officials say the fund's finances are "very strong," but claims for reimbursement from clients defrauded by Andrew F. Capoccia and two attorneys working for him in his debt-reduction practice could total $5 million to $6 million alone, although the claims might be spread over more than one year, said Timothy J. O'Sullivan, executive director and counsel to the fund. Several hundred, and possibly thousands of clients, may seek help once federal authorities distribute restitution payments, he said in an interview yesterday.

"These catastrophic losses will challenge the New York Fund's ability to be able to continue to serve as a model for effective law client protection in our nation," the fund's 2006 report warned.

The precise amount that former clients of the Andrew F. Capoccia Law Centers of Albany and a successor firm, the Law Centers of Consumer Protection that moved to Bennington, Vt., will seek from the fund depends on how much in assets and restitution federal authorities can secure from Mr. Capoccia and two attorneys who worked for him, Howard Sinnott and Thomas Daly. Mr. O'Sullivan said federal authorities have seized about $4 million in assets so far in the case.

Mr. Capoccia is serving 15-2/3 years in prison for conspiracy, mail fraud, wire fraud and other charges for his role with the two firms, which federal authorities said diverted millions in client funds to accounts controlled by Mr. Capoccia's wife. Carol Capoccia faces up to 10 years in prison and a fine of up to $250,000 when she is sentenced April 27 in connection with guilty pleas in January to obstructing a federal grand jury investigation. "

This Madison Record article contains a months work of issues: conflict of interest, change of venue, prejudice, blackmail, child ponography, indictments, plaintiff's attorney joining the firm he has sued;  it just goes on and on.

"When Gary Peel joined the Lakin Law Firm in September 2003, he had spent the previous 17 months accusing the firm of malpractice.

Peel sued the firm in Madison County Circuit Court in April 2002, on behalf of William Coates.

Peel alleged that the firm failed to sue a Greene County farmer who may have caused the death of his client's son, Michael Coates.

Peel dropped Coates as a client when he joined the Lakin firm. Chief Judge Edward Ferguson assigned the case to Circuit Judge Daniel Stack, who set it Nov. 1, 2005.

By then attitudes in Madison County had changed so fast that the Lakin firm tried to escape the community's judgment.

Six days before trial the firm's attorney, Jeffrey Mitchell of Geneva, moved for change of venue.

"Defendants cannot receive a fair trial in Madison County…," Mitchell wrote.

He argued that negative press about the firm's principal, Tom Lakin, tainted the jury pool.

He wrote that on July 20, 2005, the St. Louis Post-Dispatch reported that West Virginia suspended Tom Lakin for a year.

He wrote that on July 22, 2005, the Belleville News-Democrat reported Tom Lakin's discipline in West Virginia.

Stack denied the venue change and started the trial.

He stopped it when Bosslet and Mitchell told him they settled.

By then the author of the complaint had turned into another embarrassment for the Lakin firm.

Peel had filed a bankruptcy petition seeking relief from obligations to former wife Deborah J. Peel under a divorce agreement.

He had tried to cancel the agreement in St. Clair County divorce court, claiming she tricked him into signing a contract he did not understand.

In January 2006 he allegedly tried to blackmail her.

Grand jurors at U.S. District Court in East St. Louis indicted Peel in March 2006 on charges of bankruptcy fraud, possession of child pornography and obstruction of justice.

He left the Lakin firm.

This March, a federal jury in East St. Louis convicted him on all counts.

Back in Edwardsville, Peel's old lawsuit still hasn't gone away.

Bosslet and Mitchell never filed the settlement stipulation they told Stack they would file. The case remains open on Stack's docket."

In New York there is case law which holds the attorney liabile for errors by a process server. Here is a similar case and analysis from Arizona

"Like most states, Arizona recognizes an exception to this rule, generally referred to as the "nondelegable duty exception." Id. "The policy reasons justifying such a departure are that the employer is the one who primarily benefits from the contractor's work, the employer is free to select the contractor and may insist on one that is financially responsible and competent, and the employer has the ability to internalize the cost of insurance necessary to distribute the risk as a cost of doing business." Miller v. Westcor Ltd. Partnership, 171 Ariz. 387, 391, 831 P.2d 386, 390 (App.1991).

As the Arizona Supreme Court held in Ft. Lowell, the nondelegable duty exception arises in situations involving a "special relationship between persons," such as "persons who engage in relationships that are 'protective by nature' (e.g., the common carrier, innkeeper, employer) [who] are often held to possess an affirmative duty to guard the safety of their respective charges." Ft. Lowell, 101, 800 P.2d at 967. The Court explained:

The nondelegable duty exception is somewhat of a misnomer because it refers to duties for which the employer must retain responsibility, despite proper delegation to another. Such situations exist where the employer is under a higher duty to some class of persons. This duty may be imposed by statute, by contract, by franchise or charter, or by the common law. If the employer delegates performance of a special duty to an independent contractor and the latter is negligent, the employer will remain liable for any resulting injury to the protected class of persons, as if the negligence had been his own. The exception is premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.
The type of situation -- i.e., negligence of a process server -- was addressed in Kleeman v. Rheingold, 614 N.E.2d 712 (1993), where a client brought a legal malpractice action against a law firm based upon negligence of process server in failing to serve medical malpractice defendant within statute of limitations. The sole issue addressed by the Court was "whether an attorney may be held vicariously liable to his or her client for the negligence of a process server whom the attorney has hired on behalf of that client." Id. at 714. "

An Apology rather than a law suit.  This article reports that it works in medical malpractice.  Would it work in legal malpractice?

"Since encouraging its doctors to apologize for errors, the University of Michigan Health System's annual attorney fees have dropped by two-thirds, and malpractice suits and notices of intents to sue have fallen by half, says a former ...
"

Yesterday we reported on the Thomas Hyland letter in support of his firm's position in the Wilson Elser Legal Malpractice case.  Today, a bar association rejoinder.  This second letter is not directed to the arguments that WEMED made, but to the entire concept of arguing the merits of a law suit in the letters to the Editor venue.:

"Letter to the Editor

Letter Is Disservice To Bench and Bar

New York Law Journal
April 11, 2007

I write with reference to the letter published on April 9, 2007, from Thomas W. Highland of Wilson Elser Moskowitz Edelman & Dicker. I am disturbed both by the fact of Mr. Highland's letter and by its contents. The letter itself takes exception with no statement contained in an April 5 story to which the letter purports to respond. Indeed, that story reports the Wilson Elser firm's disappointment with the court's decision. But, Mr. Highland's letter goes beyond that perfectly natural response. He offers a one sided, condensed version of the arguments he says he looks "forward to presenting . . . to a higher court," together with the citation of cases and rehashing of evidence. His letter seems more appropriate for an appellate brief rather than a letter to the editor.

I believe that such letters, especially from lawyers associated with a case pending in the courts, are inappropriate for a variety of reasons, not the least of which is the potential threat they pose to judicial independence. As a lawyer, Mr. Highland is presumably aware that his criticism of the judge cannot be answered by the judge herself because of ethical constraints upon a judge's comments about pending cases. In that sense, the letter is patently unfair to the judge because it was composed with knowledge that the judge would not and could not respond in kind. I hope that Wilson Elser's adversaries refrain from submitting some counter-letter for publication because such partisan sparring in the press detracts from the independence of the bench, the role of appellate courts, and the dignity of the organized bar.

I hope that no members of the judiciary will be deterred from "calling them like they see them" by the potential threat of litigants or their lawyers presenting their one sided views to the media about pending or impending litigation. I urge all members of the bar to refrain from writing or circulating such letters during the course of litigation in which they are so clearly partisans. Such letters as that April 9 letter are a far cry from the scholarly and thoughtful commentary by objective lawyers, for which the Law Journal is esteemed to publish. That sort of commentary is a service to both the bench and the bar. I submit that the April 9 letter is disservice to both.

Edwin David Robertson
The author is president of the New York County Lawyers' Association. "

Geoffrey Tracktenberg reports this comma error which cost one side $1 Million in a legal malpractice case, which stemmed from a contract sentence.  The story itself came from the NY TImes.

"The dispute is over this sentence: "This agreement shall be effective from the date it is made and shall continue in force for a period of five (5) years from the date it is made, and thereafter for successive five (5) year terms, unless and until terminated by one year prior notice in writing by either party."
The regulator concluded that the second comma meant that the part of the sentence describing the one-year notice for cancellation applied to both the five-year term as well as its renewal. Therefore, the regulator found, the phone company could escape the contract after as little as one year."

The Wall Street Journal reports [subscription] that biglaw is a business, and is increasingly the target of legal malpractice suits.  The report is supplemented with a Hinshaw attorney quote.

"Big law firms are mostly in the business of keeping others out of trouble, not themselves. But some practitioners who defend law firms are seeing an uptrend in legal-malpractice claims. "The profession has become more like a business," says Philip Touitou of Hinshaw & Culbertson LLP in New York. "Now that firms have big revenues they're now seen by the plaintiffs' bar as viable targets."

Last week alone offered up two high-profile examples, each stemming from soured business deals consummated back around 2000.

On April 6, a Minnesota federal judge ordered that Dorsey & Whitney LLP disgorge about $887,000 in ... "

Moving from Bankruptcy court to Federal District Court, the law firm again loses:

"Firm's Bad Faith Leaves Bad Taste of $877,000 Malpractice Tab

New York Lawyer
April 10, 2007
Reprints & Permissions

By Leigh Jones
The National Law Journal

A Minnesota federal court has found Dorsey & Whitney liable for more than $877,000 for legal malpractice, breach of fiduciary duty and acting in bad faith for its role in a botched Indian casino deal.

Affirming a U.S. Bankruptcy Court decision issued last year, U.S. District Judge Donovan W. Frank ordered Dorsey & Whitney to turn over $887,440 in legal fees it received from former clients it represented in orchestrating a finance deal gone awry for the Akwesasne Mohawk casino in upstate New York.

In a 94-page decision, the judge determined that the 600-attorney firm breached its fiduciary duty of loyalty by representing two adverse clients at the same time and failed to inform its clients that it might have committed malpractice.

A spokesman for Dorsey & Whitney said the firm disagreed with Judge Frank's decision, which it will appeal to the 8th Circuit Court of Appeals.

Edward Gale, a partner with Leonard, O'Brien, Spencer, Gale & Sayre, in Minneapolis, represented the plaintiffs. "

Zenith Ins. Co. v. Cozen O’Connor, Case No. B184684 (Cal. Ct. App., March 21, 2007).

"The issue presented in this case relates to the nature and extent of the duty, if any, owed to the reinsurer by counsel retained by the ceding insurer to protect the interests of the insured under the underlying policy.

In this action for professional negligence, Zenith Insurance Company (“Zenith”) entered into a contract of reinsurance with Royal Insurance Company (“Royal”). Under the contract, Zenith agreed to reinsure 100% of Royal’s exposure under certain liability policies. After claims were asserted against Royal’s insured, Royal retained the law firm of Cozen O’Connor to provide legal services with respect to the defense of such claims. Ultimately, Zenith filed this action for professional negligence against Cozen alleging that an attorney-client relationship existed based on either: (1) an implied in fact contract; or (2) the theory that Zenith was an intended beneficiary of Cozen’s legal services.

The California Court of Appeals disagreed with Zenith for two reasons. First, under the “intended beneficiary” theory, both Cozen and Royal must have intended Zenith to be the beneficiary of legal services Cozen was to render. The Court held that the fact that Cozen’s representation could incidentally benefit Zenith did “not sufficiently satisfy this predicate.” Moreover, the fact that Zenith agreed to reimburse Royal for all legal fees did not change the conclusions. Second, there was no express agreement between Zenith and Cozen, and Zenith did not allege the predicate facts necessary to establish an implied contract between it and Cozen. Zenith Ins. Co. v. Cozen O’Connor, Case No. B184684 (Cal. Ct. App., March 21, 2007). "

This article from columnists Norman Arnoff and Sue Jacobs [subscription] warns us to protect legal malpractice coverage by carefully answering the application questions.

"Every year someone in each law firm has the task of completing the application for the Lawyers' Professional Liability Policy commonly called the Malpractice Policy. The policy is "claims-made" so that claims first made during the policy period will be covered during the policy in issue. If the policy is "claims-made and reported" the claim must also be reported during the policy period for coverage.

If the applicant does not disclose or misrepresents a fact that ripens into a claim or lawsuit during the policy term, the carrier may claim the law firm made a false representation of a material fact to induce the carrier to issue the precise policy. The carrier may also attempt to rescind the policy if the claim is significant.

The lawyer may believe she did not purposely answer the question falsely, but, rather, was unaware of all the underlying information. If there is an innocent reason for the nondisclosure the insurer will not be able to rescind. Rather, the carrier will have to establish the misrepresentation to be material and fraudulent, and that it would not have issued the policy for the premium charged if it had the true facts.
"

The Wall Street Journal reports:

"Charter Communications filed a lawsuit Friday against Irell & Manella, accusing the prominent Los Angeles firm of “critical errors” in completing a 1999 cable TV acquisition. The lawsuit alleges, among other claims, legal malpractice and requests damages of $150 million. Here’s the 31-page complaint and a story from Saturday’s L.A. Times.

Charter’s suit, filed in federal court in Santa Ana, Calif., also claims that Irell concealed its mistakes for as many as nine months in 2002 after learning about them. Irell has long represented Charter, a St. Louis-based cable company controlled by Microsoft poohbah Paul Allen. During the entirety of their relationship, Charter has paid Irell $55 million in fees, according to the complaint.

Stephen Higgins of Thompson Coburn in St. Louis filed the lawsuit on behalf of Charter. Also signing on to the complaint: David Freishtat of Freishtat, Mullen & Dubnow in Hunt Valley, Md., and the Enterprise Counsel Group in Irvine, Calif.

“If Charter suffered any loss at all, our firm was not the cause,” Irell partner David Gindler told the LAT. “We are confident that we will prevail as the whole story emerges in court.”

Aquino v Kuczinski, Vila & Assoc., P.C.
2007 NY Slip Op 02801
Decided on April 3, 2007
Appellate Division, First Department

Here is a legal malpractice case arising from defendant's failure to bring a slip and fall case within the statute of limitations.  Legal Mal case lost becasue attorneys did not produce evidence that plaintiff would have won.  Evidence would have  to show that casino had constructive notice of defective condition causing slip and fall. 

"The issue in this legal malpractice action is whether plaintiff established that "but for" the negligence of defendants in failing to timely commence a personal injury action on her behalf, she would have prevailed in that litigation. On July 4, 2002, plaintiff was walking through the lobby of the Trump Taj Mahal Casino Resort in Atlantic City when she slipped on a substance she identified as vomit. Plaintiff did not see any substance on the floor prior to her fall. She alleges that after she fell, a woman dressed in a blazer and holding a walkie-talkie, whom she believed to be a security guard, came over and told her to get up. When she tried to get up unassisted, she allegedly fell again in the vomit.
In the case at bar, plaintiff failed to introduce any evidence that the casino either created the dangerous condition, or had actual or constructive knowledge of it (see Mercer, 88 NY2d at 956). Plaintiff admitted in both her affidavit and deposition testimony that she has no information regarding how long the vomit was on the lobby floor prior to her accident, thus negating any possibility of proving constructive notice"

"In the final analysis, defendants' negligence in failing to investigate plaintiff's case and timely commencing an action does not relieve plaintiff of her burden of proving that she would have prevailed in that litigation but for defendants' negligence (see Brooks v Lewin, 21 AD3d 731, 734 [2005], lv denied 6 NY3d 713 [2006]; Russo v Feder, Kaszovitz, Isaacson, Weber, Skala & Bass, LLP, 301 AD2d 63, 67 [2002] ["[A] failure to establish proximate cause requires dismissal regardless of whether negligence is established"]). "

"

Shaw, Licitra, Gulotta, Esernio & Schwartz PC v. Hahn, 039977/06
Decided: March 20, 2007

Judge Andrew M. Engel

NASSAU COUNTY
District Court

Judge Engel

The Defendant moves for an order dismissing the Complaint herein, pursuant to CPLR §3211(u)(4), imposing sanctions upon the Plaintiff, pursuant to DR 7-102, DR 7-104, 22 N.Y.C.R.R. §130-1, and 22 N.Y.C.R.R. §130-1.1, prohibiting the Plaintiff from filling my further legal actions against the Defendant and awarding the Defendant damages.

The Defendant seeks dismissal of the present action, alleging that there is a prior action pending for the same relief, between these parties, in the Supreme Court of Nassau County. The Defendant submits a copy of the Summons and Complaint in such action, entitled, Shaw, Licitra, Gulotta, Esernio & Schwartz, P.C. v. Christopher Hahn, hearing Index No. 256/05, (the "Supreme Court Action"). The Plaintiff neither opposes this motion not denies that the action before this court seeks the same relief as is sought in the pending Supreme Court Action. Additionally, a comparison of the two (2) Complaints confirms that the relief sought in this action is contained within the relief sought in the Supreme Court Action.

Accordingly, the Defendants' motion to dismiss the Complaint, pursuant to CPLR §3211(a)(4), is granted; and, the Complaint is dismissed.

The Defendant seeks the imposition of sanctions against the plaintiff for the commencement of this action, alleging that same was commenced for the sole purpose of harassing the Defendant. As evidence of such harassment, the Defendant not only points to the fact that the Plaintiff, a law firm representing itself, knew there was a prior action pending at the time it commenced this action, but alleges that this is the second time the Plaintiff has commenced the identical action in this court.

The Defendant alleges that in January 2006 the Plaintiff commenced an action against the Defendant, in this court, which was identical to the action presently before the court. A copy of the Summons and Complaint in that action (the "Second Action"), dated January 18,2006, is provided to the court. A comparison of the Summons and Complaint in the Second Action and the Summons and Complaint in the action presently before the court reveals that they are identical. This is not disputed by the Plaintiff.

The Defendant further alleges that following service of the Second Action counsel for the Defendant contacted Plaintiff which agreed to withdraw the Second Action. According to counsel for the Defendant, however, he has never received confirmation that the Second Action was withdrawn. Defendant does not however, allege that the Second Action is actually still pending.

The Official Compilation of Codes, Rules and Regulations of the State of New York, 22 N.Y.C.R.R. §130-1.1, provides, in pertinent part:

(a) The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs. in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct, as defined in this Part. In addition to or in lieu of awarding costs, the court, in its discretion may impose financial Sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, Which shall he payable as provided in section 130-13 of this Subpart. This Part shall not apply to town or village courts, to proceedings in a small claims part of any court, or to proceedings in the Family Court commenced under article 3, 7 or 8 of the Family Court Act.

(b) The court, as appropriate, may make such award of costs or impose such financial sanctions against either on attorney or a party to the litigation or against both. Where the award or sanction is against an attorney, it may be against the attorney personally or upon a Partnership, firm, corporation, government agency, prosecutor's office, legal aid society or public defender's office with which the attorney is associated and that has appeared as attorney of record. The award or sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.

The rest.

Highly respected attorney Thomas Hyland, of Wilson Elser, writes in the NYLJ, in part:

"We write in response to your article, "Judge Orders Firm to Disgorge Fees Over Ethics Breach," (NYLJ, April 5, page 1) which discusses Justice Marcy S. Friedman's decision in Ulico v. Wilson, Elser, Moskowitz, Edelman & Dicker, granting partial summary judgment against our firm. The article notes that Wilson Elser is an "insurance defense giant." We are proud of our reputation and standing in the insurance defense and greater legal community. We have built this reputation with over 30 years of exceptional service to our clients, and in accordance with the highest ethical standards.

With all due respect, Justice Friedman's decision is flawed and contrary to the law and facts. As is the right of any litigant aggrieved by the order of a lower court, we intend to appeal. Unfortunately, an erroneous decision may do damage, even if ultimately overturned. While it would be impossible to demonstrate in this forum all of the problems underlying the court's decision, we feel compelled to note the following:

The court stated that "the facts relevant to [the claim of breach of fiduciary duty] are largely undisputed," yet failed to heed the most important undisputed fact: Wilson Elser did not represent two parties having adverse legal interests. Rather, the claim concerns the propriety of Wilson Elser doing work for an existing client that was potentially adverse to the business interests of Ulico. This is a question of interest to all lawyers. If, for example, a lawyer assists a restaurant in obtaining a liquor license, does he violate his ethical obligations to that client if he also helps another restaurant on the same street obtain a license? A "competitor" is simply and obviously not an "adversary."

Here's the rest of the letter.

The NYLJ reports "An attorney who violates the state's official Codes, Rules and Regulations (NYCRR) by failing to obtain a written retainer agreement or letter of engagement from a client in a nonmatrimonial case can still recover fees, an appeals court held last week in a ruling of first impression.

An unanimous panel of the Appellate Division, Second Department, said its interpretation of the rule, 22 NYCRR 1215.1, would not render it "impotent and unenforceable," as the appellant in Seth Rubenstein, P.C. v. Ganea, 2005-07813, had alleged.

Attorneys who fail to heed Rule 1215.1 place themselves at a marked disadvantage, as the recovery of fees becomes dependent upon factors that attorneys do not necessarily control, such as meeting the burden of proving the terms of the retainer and establishing that the terms were fair, understood, and agreed upon," Justice Mark C. Dillon (See Profile) wrote for the court. "There is never any guarantee that an arbitrator or court will find this burden met or that the fact-finder will determine the reasonable value of services under quantum meruit to be equal to the compensation that would have been earned under a clearly written retainer agreement or letter of engagement."

Since 2002, attorneys have been required to obtain retainer agreements or letters of engagement from all non-matrimonial clients under 22 NYCRR 1215.1, a rule that was created by the four Appellate Divisions (matrimonial cases are governed by a stricter rule, 22 NYCRR 1400.3).

The Second Department examined the implications of the 2002 rule after numerous trial courts reached different conclusions ."

From Law.com 

"Beginning in the fall of 2004, partners in Dallas-based Jenkens & Gilchrist who left the firm also left behind their capital contributions, which in some cases totaled hundreds of thousands of dollars, due to the firm's "contingent liabilities. The former Jenkens partners who left their cash behind may never see a penny of it, or they may recoup some of it, depending on what's left over after the firm covers all of its financial obligations in the wake of its closing on March 31.

Gilliam, a commercial litigator, says his primary job is to address litigation against the firm and to try to resolve 15 pending suits, which primarily are legal malpractice cases filed in state courts in Texas, New Jersey and California. He says the firm has "large exposure" in a couple of the suits, but "in those cases we feel like we have viable defenses."

"

Medical malpractice trial lost with $217 Million verdict, which could have been settled within policy limits for $ 4 million leads to a legal malpractice by doctor versus attorney. This article tells us:

"Among the claims against their former lawyers was the fact their lawyers turned down settlement offers of $1,000,000.00 for one doctor and $3,000,000.00 for the other doctor. The doctors claim that the proposed settlements were never adequately explained to them. The doctors say that their attorneys failed to properly advise them, fraudulently concealed information, and failed to respond to settlement demands.

The doctors' new lawyers who are suing their former malpractice defense lawyers state that the case should have never gone to trial, that it should have been settled, and claim that the doctors were "hung out to dry."

The malpractice case against the doctors seems clear. Their patient went to a hospital emergency room complaining of nausea, headache, dizziness, and double vision. The patient was essentially sent home five hours later with a painkiller prescription and a diagnosis of sinusitis. "

lthough the defendant doctors could not diagnose the condition, the patient in reality was having a stroke. He returned to the hospital with more severe symptoms the next morning, underwent surgery hours later to relieve brain swelling, and ended up in a coma for three months. When he awoke from the coma, he was permanently disabled. The patient, who was 50-years-old at the time was awarded $117,000,000.00 for economic damages, pain, and suffering. The doctors were then ordered to pay $100.1 million dollars in punitive damages. This was the largest jury verdict in Florida ever.

In the doctors' suit against their former malpractice lawyers, they claim that the lawyers who were hired by their malpractice insurance company were protecting the interest of the insurance company and not theirs. One of the doctors said he was pressured by the lawyers to say that he always gave a patient a physical exam and a patient history even if such an examination was previously performed by a physician's assistant. This doctor said he did not perform physicals on patients who had already been seen by a physician's assistant and that he did not remember personally examining the patient who sued him for malpractice. In spite of being informed by the doctors of the truth, the insurance company's lawyers continued denying that anyone except the doctor was involved in the patient's care and treatment

This article from the venerable Madison County Record reports that the Lakin Law Firm, which is a defendant in a big legal malpractice case arising from structured settlement loses, may now face loss of coverage.

"Lakin Law Firm founder Tom Lakin has sworn in a civil suit that he saw no liability on his part for the disappearance of money from structured settlements of his clients.

Clients of Lakin and other firms lost about $50 million eight years ago when the manager of their settlement funds, James Gibson, stole the funds.

Gibson was arrested in South America and went to prison in America.

Attorneys who had advised clients to trust him faced possible malpractice charges. Their insurers reimbursed the clients.

Lakin's malpractice insurers, however, have not paid. "

Since 2002 the Illinois State Bar Association Mutual Insurance Company has sought a Sangamon County circuit court order rescinding a malpractice policy it issued to the Lakin firm in 2001.

ISBA Mutual argues that it would not have issued the policy if the firm had not misrepresented facts in its policy application.

According to ISBA Mutual, the firm stated it did not know of claims or potential claims against it when the firm knew about such claims.

The firm switched its malpractice to ISBA Mutual from American National Insurance, later known as Great American Insurance.

In 2002 ISBA Mutual filed suit in Sangamon County for declaratory judgment against the firm.

Robert Chemers of Chicago wrote that before ISBA Mutual issued the policy, the firm advised clients of potential claims from Gibson's theft.

The Appellate Division has ruled that plaintiff bank has lost its attorney-client privilege with subsequent attorneys over the securities gone bad legal malpractice case against Chadbourne & Parke. 

"Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered November 23, 2005, which, to the extent appealed from as limited by the briefs, declared that plaintiffs waived the attorney-client privilege as to legal advice they received regarding compliance of their Russian operation with Russian tax laws and licensure requirements, affirmed, without costs.

Defendant sufficiently demonstrated that the advice it gave in the course of its allegedly negligent representation was framed, in this malpractice action, as the sole cause of plaintiffs' injury in Russia. Invasion of the attorney-client privilege is necessary, under these circumstances, to determine the validity of such claims, and is vital to the defense (see Orco Bank v Proteinas Del Pacifico, 179 AD2d 390 [1992]).

We have considered plaintiffs' remaining arguments and find them unavailing." 

Note Justice McGuire's dissent: " For these reasons, I would hold that by bringing this action plaintiffs did not put at issue, and thereby waive the attorney-client privilege with respect to, any advice they received on tax and licensure issues (Stark v Greenberg, Dauber & Epstein, 219 AD2d 571, 572 [1995] [communications between plaintiffs and their attorneys over issues not raised in malpractice action remain privileged]; TIG Ins. Co. v Yules & Yules, 1999 US DIST LEXIS 17607, *4-5, 1999 WL 1029712, *1 [SD NY, Nov 12, 1999] ["at issue" waiver recognized "where the party is in fact invoking the substance of the privileged conversation . . . or where the claim or defense is of such a nature that an assessment of its merits requires an examination of the substance of a privileged conversation"] [construing New York law] [emphasis added

Justice March Friedman ruled last week that Wilson Elser must disgorge $ 3 Million + fees based upon a  breach of fiduciary duty, and faces $100 in legal malpractice damages as the case progresses.  The story goes on:

"Insurance defense giant Wilson, Elser, Moskowitz, Edelman & Dicker has been ordered to disgorge millions of dollars in legal fees paid by an insurance client who accused the firm of helping another client set up a competing business.

In a March 29 decision, Manhattan Supreme Court Justice Marcy S. Friedman granted summary judgment to trustee liability insurer Ulico Casualty Co. on its claim that former counsel Wilson Elser breached its fiduciary duty by participating in a scheme to transfer Ulico policyholders to another insurer.

The judge ruled that there was "no triable issue of fact" about Wilson Elser's breach of its duty to Ulico and said the law firm had failed "to perceive its ethical obligation to Ulico."

"While Wilson Elser had the right to represent competitors ... it did not have the right to represent competitors in setting up a competing business to which it was contemplated that Ulico's accounts would be transferred," Friedman wrote in Ulico Casualty Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 602229/99.

"Put another way ... Wilson Elser did not have the right to prefer one client over another when the clients' interests diverged," the judge continued.

She ordered Wilson Elser to forfeit all legal fees it received from Ulico from Jan. 1, 1996, to June 30, 1999. Ulico has claimed it paid the law firm more than $3.4 million in fees during that time. The judge also permitted Ulico to go forward with other claims for legal malpractice and tortious interference with contract. Ulico has requested total damages from Wilson Elser of more than $100 million. "

Plaintiff attorney sued defendant client for legal fees and client counterclaimed for legal malpractice.  At trial plaintiff attorney lost and client won a verdict of $ 31,000 for legal malpractice.  The AD1 found that neither the fee case nor the malpractice case were proven. The malpractice case failed because although a conflict of interest was demonstrated, no deviation was shown.

This article is about medical malpractice, but it applies to legal malpractice. Examples?  When is a tax legal malpratice case complete?  is it on the day of the mistake, on the day of the filing, on the last date which a return may be filed, or when the IRS determines there was a mistake?

"Duty, breach, causation and injury: These are the traditional elements of a tort claim. Thus, under customary theories, a tort is inchoate unless and until the plaintiff suffers actual injury. For example, a plaintiff who has an increased risk of disease because she has been exposed to a defective product, but no manifest illness, would have no cause of action. Faced with this quandary, plaintiffs have resorted to novel claims and theories. They have argued, for instance, that recovery should be allowed for increased risk of future disease or for emotional distress"

The NYLJ reports:

Day Pitney Lawyers Let Off Hook in Malpractice Suit Over Arms-Dealer Loan
Mary Pat Gallagher
New Jersey Law Journal
April 4, 2007

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A company that loaned $3.5 million to a business owned by a man convicted of trying to sell military parts to Iran illegally cannot sue the lawyers it says failed to warn it of the risk.

A federal judge on March 30 dismissed malpractice claims against lawyers from Day Pitney and other firms, finding the lender should have sued the lawyers as part of its state court suit against the borrowers and that, in any event, it was the borrowers' fraud that caused the loss.

The case, Keltic Financial Partners v. Krovatin, 05-4324, stems from Daniel Malloy's 1997 arrest and indictment for the attempted sale of 20 Phoenix missile-battery components to Iran. The long-range air-to-air missiles were the type used on F-14A Tomcat jets, which the United States had sold to Iran before 1979, when the shah was overthrown and the country became an Islamic republic.

The NYLJ reports:

"Judge Bars Firm From Suing Ex-Client in Two Courts

By Rosamaria Mancini
New York Law Journal
April 4, 2007

A Mineola law firm cannot sue a former client over unpaid legal fees in both state Supreme Court and District Court if the causes of action are the same, a Nassau judge has ruled.

In Shaw Licitra v. Hahn, 039977/2006, District Court Judge Andrew M. Engel dismissed a suit brought by Shaw, Licitra, Gulotta, Esernio & Schwartz against Chris R. Hahn.

The decision will be published Monday.

"The court finds that such conduct was frivolous, being completely without merit in law, unable to be supported by any reasonable argument for an extension, modification or reversal of existing law, and undertaken primarily to harass or maliciously injure the defendant," Judge Engel wrote.

He imposed a $1,000 sanction against the firm and ordered it to deposit the funds in the Lawyers' Fund for Client Protection. A hearing will be held April 27 to determine how much the firm will pay in attorney's fees to Mr. Hahn. "

Barcelo v. Elliott is a Texas case which holds that privity is necessary for a legal malpractice case.  Here is an article from Baylor Law Review, the TexSupp which discusses the case, its holding, and how the courts have gradually whittled away the privity requirement.

As in other states, ocassionlly an attorney may be held responsible to non-clients.  Opinion letters, fraud, and some other conditions may apply. 

Its a short opinion, the Court of Appeals reversed and remanded this case for further proceedings.  Zorn v. Gilbert is a legal malpractice arising from a matrimonial.  In the opinion, the Court of Appeals determines the date of the judgment of divorce, and determines that the law firm continued to represent Zorn for some months thereafter.  Based upon this, the Court of Appeals found that the case was timely.

Here is access to a podcast interview with Oliver Hill, a civil rights attorney who was part of the NAACP 50's/60's legal push for civil rights, equality, and modernity.

"Civil rights attorney Oliver Hill is well known for the role he played in the landmark U.S. Supreme Court decisions that ended the doctrine of “separate but equal” and other forms of racial discrimination in the United States. One of the cases in which Hill was a key figure was NAACP v. Button. On its face, Button was a challenge to Virginia statutes defining and punishing attorney malpractice. The impact of the 1963 decision was, however, far greater. NAACP v. Button established the principle that active encouragement of public interest litigation is “speech” protected by the First Amendment – a principle that was critical to civil rights litigation."

Here is a very interesting article on the question of whether law, statute and judicial gloss all favor lawyer defendants in legal malpractice.  It compares treatment of medical malpractice to legal malpractice and concludes that the real question to ask is:  how will a decision in any given situation affect the legal community?

"This Article answers this question with the following jurisprudential hypothesis. Many legal outcomes can be explained, and future cases predicted, by asking a very simple question: is there a plausible result in this case that will significantly affect the interests of the legal profession (positively or negatively)? If so, the case will always be decided in the way that offers the best result for the legal profession.

The article presents theoretical support from the new institutionalism, cognitive psychology and economic theory. The Article then gathers and analyzes supporting cases from areas as diverse as constitutional law, torts, professional responsibility, employment law, evidence, and criminal procedure.

The questions considered include: why are lawyers the only American profession to be truly and completely self-regulated? Why is it that the attorney-client privilege is the oldest and most jealously protected professional privilege? Why is it that the Supreme Court has repeatedly struck down bans on commercial speech, except for bans on in-person lawyer solicitations and some types of lawyer advertising? Why is it that the Miranda right to consult with an attorney is more protected than the right to remain silent? Why is legal malpractice so much harder to prove than medical malpractice? The Article finishes with some of the ramifications of the lawyer-judge hypothesis, including brief consideration of whether our judiciary should be staffed by lawyer-judges at all. "

Union members often use attorneys who are provided by the Union.  After all, they pay union dues and deserve this free attorney.  However, when things go wrong, they cannot sue. 

"Claim of malpractice by the union's attorney rejected
Mamorella v Derkasch, App. Div., Fourth Dept., 276 AD2d 152

Lucille Mamorella asked the Appellate Division “to reject as against public policy the well-established rule that an attorney who performs services for and on behalf of a union may not be held liable in malpractice to individual union members where the services at issue constitute a part of the collective bargaining process.”

The Appellate Division declined to do so. The court said, "

Sound policy reasons as well as established precedent compel the conclusion that attorneys who perform services for and on behalf of a union may not be held liable in malpractice to individual grievants where the services the attorneys perform constitute a part of the collective bargaining process.

The court cited Peterson v Kennedy, 771 F2

Hinshaw reports this case:

"Indiana Court of Appeals Holds Excess Insurer May Not Sue Insured's Attorneys for Legal Malpractice

Querrey & Harrow, Ltd., et al. v. Transcontinental Insurance Company, __N.E.2d__, 2007 WL 505791 (Ind. App. 2007)

The court held that an excess carrier could not bring a legal malpractice action against counsel for the insured and the primary carrier under an equitable subrogation theory as such a theory would be contrary to the Indiana rule of non-assignability of legal malpractice claims. The court also held that on the facts as adduced, the excess carrier could not assert that it had an express or implied attorney-client relationship with counsel for the insured and the primary carrier.

This is really unheard of.  Jail for Disciplinary violations by an attorney. This, from the NYLJ:

"Panel Sentences Lawyer to 10 Days in Jail for Misconduct
Mark Fass
New York Law Journal
April 2, 2007

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An immigration attorney charged with 19 counts of misconduct -- including misappropriating payments, commingling funds and lying to clients about the status of their cases -- has not only been disbarred by the New York Appellate Division, 1st Department, but also fined $1,000 and sentenced to 10 days in jail.

Kemakolam Comas ignored numerous attempts by the disciplinary committee to communicate with him and failed to submit files as ordered or appear at disciplinary hearings.

"[T]he Referee's finding of contempt has abundant support in the record insofar as an order of this Court was in effect, respondent had knowledge of the order, he knowingly disobeyed the express and unequivocal directions set forth therein, and he intentionally impaired the rights and remedies of the Court-appointed Receiver concerning this proceeding," the panel said. "Indeed ... respondent's conduct throughout the course of this matter has been nothing less than astounding and his continued, blatant defiance ... requires us to impose a severe penalty."

Appel-Hole v. Wyeth-Ayerst Laboratories, 700000/98
Decided: March 27, 2007

Justice Charles Edward Ramos

NEW YORK COUNTY
Supreme Court

Justice Ramos
In motion seq. no. 007, Parker and Waichman LLP (P&W), on its own behalf and on behalf of its clients, moves pursuant to CPLR 2221 for leave to renew or reargue its motion to intervene (previously denied by order dated November 24, 2003). In addition to P&W, proposed intervenors referred to as the "Abramova Plaintiffs," also seek leave to intervene. In the event intervention is granted, P&W and the Abramova Plaintiffs seek disclosure of certain documents referred to as submissions in support of the amended order dated November 7, 2001, which approved the settlement of this action and will then seek to vacate that settlement order.1

In this action, known as the New York Diet Drug Litigation,

New York County Index No. 700000/98, plaintiffs asserted claims of personal injury and loss of consortium allegedly due to the ingestion of "fen-phen" diet drugs.2 Some of those plaintiffs and others are here challenging a settlement approved by our predecessor court (Freedman, J.) by her order dated November 7, 2001, which, inter alia, held that the terms of the settlement were fair and reasonable and conformed with all ethical requirements. In that settlement, defendant, American Home Products ("AHP"), offered a large sum of money3 to settle virtually all claims.4

The ethical issues raised in this case arise out of one of the thorniest areas in tort law - the process to be applied in the settlement of mass tort litigation. Because of the large number of claimants whose cases are settled at one time (in this case over 5,000), mass tort settlements often take the form of collective settlement structures. The alternative to a collective settlement would require the piecemeal analysis of the merits of each claim and individual settlements thereafter, as contemplated when the classic case dominated tort law (one injured plaintiff and one or more allegedly responsible defendants). This would consume the lifetime of many of the claimants themselves when there are thousands of claims to be compromised. As a consequence, counsel and the courts have devised means of settlement expedition, such as the placing of claimants in objective categories of severity of injury, age, gender, economic status, and each claimant's relationship to the acts of the defendant, and then entering into a mass settlement. Because of the large number of clients, great care must be exercised to insure that each client understands the settlement offer and is treated fairly. Ethical rules guide the actions of counsel in these circumstances.

This mass settlement was further complicated by the need to pay a portion of the attorneys' fees earned by settling counsel to other attorneys who referred additional clients. Therefore, claimants who were the original clients of the settling attorneys, Napoli Kaiser & Bern ("Napoli Firm"), would generate greater net legal fees for the firm than would clients who were referred to them by other attorneys (e.g. P&W and others).

The record on this motion, which includes a number of previously sealed documents and an affidavit of a former member of the Napoli Firm, has unfortunately raised serious questions regarding the settlement process herein, including claims that:

(1) claimants who were Napoli Firm clients were offered disproportionately larger settlements because the firm unfairly inflated settlement offers for its clients so that the attorneys' fees earned by the firm would be greater;

(2) unknown to the claimants, their cases were not settled for an amount negotiated for each claimant with AHP, rather their claims were settled based upon the Napoli Firm's own evaluation of the value of each claim in light of a lump sum offer;5

(3) the Special Master6 appointed by the settling court did not make individual evaluations of the settlement offers in each case as was represented by the Napoli Firm to its clients and to the settling court; and

(4) the ethics opinion submitted in support of the settlement was flawed and based upon less than a full understanding by the expert of the circumstances surrounding the settlement and the applicable law.

Notwithstanding the Napoli Firm's protestations to the contrary, no court, trial or appellate, has ruled on these issues in a contested hearing. This is explained by the fact that the order of compromise sought to be vacated here, dated November 7, 2001, was submitted to our predecessor court and executed, ex parte.7

The NYLJ reports this case:

Goldston v. Bandwidth Technology Corp., 112098/04
Decided: March 6, 2007 Justice Rolando T. Acosta
NEW YORK COUNTY
Supreme Court

"This matter, tried before the Court without a jury, primarily revolves around whether the retainer agreement executed by plaintiff Alan M. Goldston on behalf of his law firm, Goldston & Schwab ("G&S"), and Jonathan Star, Bandwidth Technology Corp. and Bandwidth Holdings Corp. ("Bandwidth")'s president, board member and shareholder, is enforceable. Pursuant to the retainer agreement, G&S would be compensated with two percent of the company stock. The Court, by order dated September 29, 2006, found, inter alia, triable issues of fact as to whether Star, as president of Bandwidth, a start-up corporation where informal action had been customary, had the authority to enter into the retainer agreement with G&S. The Court also found triable issues of fact as to whether the retainer was enforceable as a "general" retainer or unenforceable as a "non-refundable special retainer," which would entitle plaintiff to be compensated in quantum meruit only. The Court's Order was affirmed on September 21, 2006. Goldston v. Bandwidth Technology Corp., 32 A.D.3d 747 (1st Dept. 2006). "

Another blog blurb from Scottsdale:

"Attorneys know that deadlines matter, but in this age of electronic filing and 24-hour drop boxes it was just a matter of time before a court would have to address a filing that was, say, a mere six minutes late. That is what the United States Court of Appeals for the 10th Circuit had to deal with and this is what they had to say about it:

Six minutes seems trivial and unlikely to cause prejudice, but if six minutes can be excused, why not six hours or six days? As we discuss, there is a safety valve, but it lies with the district court and requires a timely application, which never materialized in this case. Ignoring established purposes and methods for extensions of time, Plaintiffs argue for different or additional relief. They are out of luck. Like statutes of limitation, statutes of repose, and other such time bars, rights may be irretrievably lost due to delay. "

Legal malpractice requires legal representation, while breach of fiduciary duty can be had by a non-attorney as the Scottsdale Personal Injury Lawyer tell us.

"Many people do not understand the difference between legal malpractice and breach of fiduciary duty.

Legal malpractice arises when an attorney owes someone a duty of care and, by an act or omission, the attorney's conduct breaches that duty of care and causes that person cognizable harm

Breach of fiduciary duty arises when there is a "special relationship" between an attorney and, typically a client, where trust or control over another's affairs are vested with an attorney. The major difference between legal malpractice and breach of fiduciary duty lies in the nature and scope of the applicable "duty."

Here is a divorce legal malpractice case from the Divorce Law Journal  which illustrates the "privity" question.

"Issue and Holding:
Whether an attorney owed any duty to an opposing party in a divorce case. The Court held no, the attorney owed no duty under the facts of this case.

Facts:
Baker filed for divorce from her husband, Collins, in 1989. A divorce decree, which referenced their Property Settlement Agreement, was entered in 1990. As part of the Agreement, Collins agreed to pay Baker $500,000. A balloon payment of $300,000 was due by January 1, 2002 and the remaining $200,000 due in ten annual installments of $20,000 continuing through January 1, 2001. The Agreement also provided that if the balloon payment was paid prior to the due date, the other payments would be forgiven. As security for the payments, Baker was given liens on all of Collin’s stock holdings of closely held corporations. Collin was to “execute all necessary documents to effectuate these liens” and “the Certificates shall be held by Ronald Coombs, Attorney.” Coombs represented Collins in the divorce proceedings and in other matters.
Despite the Agreement, Collins never gave Coombs any stock certificates before Collins died in September 1999. Coombs asked Collins for the certificates, but Collins never delivered them. Shortly before Collin’s death, Baker discovered that he had sold his interest in his largest corporation in 1992 without perfecting a lien in his stock holdings and making the agreed upon transfer to Baker. Baker did not know what happened to the other corporations, but none of them were listed as assets of his estate. Baker did not know whether any liens were ever prepared and she could not recall inquiring as to the liens or certificates prior to Collin’s death.
In November 1999, Baker filed a proof of claim against Collin’s estate for monies owed to her under the Agreement. The estate objected. Therefore in December 1999, she filed a complaint against the estate, Collin’s widow, and Coombs. Baker alleged that properties were transferred out of Collin’s name, prior to his death, in a deliberate attempt to prevent the payment of monies he owed to her and to reduce the inheritance of his child. She also alleged that Coombs failed to follow the terms of the Agreement in not holding the stock certificates and allowing Collin’s to sell his businesses without taking action to assure that Baker be paid what she was owed.
Baker was awarded a judgment against the estate. Baker and Coombs then filed cross motions for summary judgment. The trial court concluded that Coombs did not commit professional negligence and that he was not personally liable for the monies Collins owed Baker. The court held that Coombs signed the Agreement only in his capacity as Collin’s counsel, and not as a party to the Agreement. Therefore, only Collins and his estate could be held liable. Baker appealed. "

Appellate Law & Practice of California reports this legal malpractice case:

"CA1: Legal malpractice claims by 3d-party based on defrauded ponzi scheme fail
International Strategies v. Greenberg Traurig, 06-1790. This case involves a lot of people and firms that I really don’t want to smear. Not because I don’t like smearing, but because I think that most of the defendants here were trying to represent their clients in a good way, but their clients did a lot of bad things. If any of the people involve want to chime in, send me an email and I will prominently post your version of events or the law, or correct anything I got wrong (based on the published opinion.)

The underlying transactions are quite complex. But they ended in their ex-client suing their lawyers. ISG “invested” money with Corporation of the BankHouse ("COB"), who seemed to promise the impossible, and, of course, was a ponzi scheme. COB claimed that it was the victim of another scheme, and its CEO declared that "I have chosen to move to prepare litigation against the parties utilizing the law firm of Greenberg & Traurig [sic]. I have utilized the law firm of Seamin Cherin & Melott [sic] for the criminal assistance against the parties." Specifically, A. John Pappalardo began representing COB, and somehow COB convinced ISG to not independently sue the people that “defrauded” COB, because they would take care of it. Therefore, “ ISG alleges that these representations, and other events that we detail below, led it to believe that Pappalardo was ISG's legal representative and that an attorney-client relationship had been formed.”

Pappalardo kept telling everyone that he would recover the funds, but he never sued anyone. Eventually, “ISG finally retained outside counsel on November 7, 2001. Through counsel, ISG filed suit against COB and Pomeroy in March 2002. ISG obtained a $10 million judgment in that suit, but the award has proven uncollectible.” Then, ISG sued everyone.

The Story

"Four years of lawsuits and federal investigations had worn down the leaders of Jenkens & Gilchrist. Many of their biggest earners were leaving the law firm and taking their prized clients with them. And it had become hard to attract talent, with no end in sight for the firm's problems.

Also Online
04/01/07: IRS cuts, growing wealth gave rise to questionable tax shelters

04/01/07: Jenkens' collapse not an unusual case

03/30/07: Jenkens & Gilchrist closing after admitting role in tax fraud

03/23/07: Jenkens loses most of its Chicago staff

02/28/07: Jenkens & Gilchrist shrinking in wake of tax scandal

Graphic: Rise and fall (.pdf)
It was time to execute the last-ditch plan: dissolve the firm. Jenkens & Gilchrist couldn't be saved. So the firm's leaders had to try and save the people. "There is a timeline beyond which even the most loyal people say no," said former chairman Tom Cantrill. "It had just taken so long."

Founded 56 years ago and once the largest law firm in Dallas, Jenkens is closing its doors for good this weekend. What drove it to extinction was a combination of issues, including misjudgments tied to rapid growth and an aggressive drive to bring in business.

But above all, a risky tax shelter practice out of its Chicago office brought about the firm's end. The tax scheme, which Jenkens long defended but wound up admitting was fraudulent, left a cloud that would not disperse, according to interviews with nearly three dozen people inside and outside the firm.

Anthony Lin in the NYLJ reports:

"Federal prosecutors in Manhattan have entered into a nonprosecution agreement with Dallas law firm Jenkens & Gilchrist over its past involvement in illegal tax shelters, a scandal that has already fatally crippled the once-thriving firm.

Between 1998 and 2003, the firm's Chicago-based tax shelter practice provided hundreds of legal opinion letters in support of tax shelters the Internal Revenue Service subsequently deemed illegal. The criminal probe of the firm by the Southern District of New York U.S. Attorney's Office followed several civil suits by tax shelter investors whose claims the firm has agreed to settle for $85 million.

As part of the agreement, Jenkens & Gilchrist will pay a $76 million civil penalty to the IRS, which estimates 1,400 taxpayers relied on the opinions. The firm also has pledged continued cooperation with an investigation of the firm or individual lawyers involved in the tax shelter practice "

Hinshaw reports that there is no insurance coverage for this attorney-attorney law suit over referral fees. "The Louisiana Supreme Court held that a lawyer’s claims made policy did not require the insurer to defend an insured lawyer who was sued by another lawyer for allegedly fraudulently inducing him to accept a client whose claim was time-barred"

Here is a report of the case in which Reed Smith is accused of conflict of interest and legal malpractice.

"In Axcan Scandipharm v. Reed Smith, Axcan, a pharmaceutical company, claimed that the firm engaged in an impermissible conflict that led to disclosure of confidential information by the firm to a second client.

According to an opinion written by Philadelphia's Commerce Case Management Program Judge Howland W. Abramson, Reed Smith represented Axcan in a patent litigation case brought against the company in federal court. Axcan was indemnified by American Home Products Corp. (AHP) -- which is now known as Wyeth -- and/or Eurand International, and AHP/Eurand paid Reed Smith for its representation of Axcan under that indemnification agreement, Abramson said. "

Man wrongfully convicted of murder, now exonorated and released.  He brings a suit against all, including his attorney.  An article on the case.

Long a question in legal fee cases is whether the cost of electronic legal research [monthly, or per case] is part of the general overhead of a lawfirm, or a cost which may be awarded to the successful attorney?

Here is a case: Insinga v. Cooperative Centrale Raiffeisen Boerenleenbank B.A., 03 Civ. 7775
Decided: March 12, 2007  District Judge Richard J. Holwell  U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK  [case viewable by subscription] which holds that electronic legal research costs are recoverable in the 2d Circuit.

Here is a quote from the case.  Note that the court also awards fees for bringing the motion for fees.

"With respect to costs, although plaintiff has outlined the types of costs for which he requests reimbursement, he has not yet submitted figures to the Court. Defendants have reserved their right to respond to plaintiff's specific requests after he submits a bill to the Court. In the meantime, defendants object to one category of plaintiff's request: reimbursement for electronic legal research. The Second Circuit has made clear, though, that "charges for such online research may properly be included in a fee award." Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 369 F.3d 91, 98 (2d Cir. 2004); see also James, 2005 U.S. Dist. LEXIS 5401, at *67 ("Legal research costs are recoverable in an application for attorneys' fees."); Raniola v. Bratton, 2003 U.S. Dist. LEXIS 7199 (S.D.N.Y. 2003) (awarding cost of Westlaw research because, "absent the use of computer research, the awarded attorney's fees would probably be larger" (internal citation omitted)).

The Court therefore directs plaintiff to submit a bill detailing the costs for which it seeks reimbursement, including electronic legal research, within thirty days of this Opinion. The Court also grants plaintiff leave at that time to submit a supplemental motion for the legal services rendered after the date this motion was first served, which, among other things, will presumably include records for time spent defending this motion and preparing plaintiff's opposition to defendant's unsuccessful motion for judgment as a matter of law. See also Weyant v. Okst, 198 F.3d 311, 314 (2d Cir. 1999) (permitting compensation for time spent after the initial fee application, including time spent in preparing and defending an application for fees). "

When we search the web for news and articles about legal malpractice, the term often pops up as a sort of generic "wrong" when it neen not really apply. This publicity release seems to be one of those instances. 

"High-profile United States Attorney Patrick Fitzgerald's office is defending three employees of the Internal Revenue Service (IRS) and U.S. Attorney Lynne Murphy for their part in a purported $9 million tax fraud. They have been sued in the Northern District of Illinois for allegedly fabricating and falsifying IRS tax records.

Henry has sued the United States Department of Justice, the IRS and all individuals involved, for fabricating and falsifying this deficiency notice and for ignoring the Supreme Court rulings. Based on the evidence that the IRS claims it has in its possession Goldman Sachs, Cisco Systems and Henry Paulsen along with the IRS and the U.S. Government withheld records and evidence in the Delaware bankruptcy filing of American Metrocomm Corporation. Henry is claiming civil damages for legal malpractice, bankruptcy fraud and damages against the government and its individual employees for creating and falsifying government tax records and for withholding documents from the bankruptcy court. "

However, Ms. Murphy maintains that a U.S. attorney can commit fraud and ignore Supreme Court rulings while working for the U.S. Government, because the U.S. Government and its employees are immune to lawsuits under so-called “sovereign immunity.” In the meantime, Ms. Murphy continues to work on tax-related cases.

the New York Post is rarely a cite for us.  Here is a legal malpractice story from the Post about the subway hero and legal malpractice.  It can creep into almost any story.

"The Subway Superman who risked his life to save a fellow straphanger says he was taken for a ride and then thrown under the bus by a smooth-talking lawyer and her business partner"[The lawyers'] conduct in seeking to extract money from schoolchildren . . . is causing damage to his reputation and portraying him in a false light as a man of greed," the suit says.

His legal-malpractice suit seeks unspecified "damages for injury to plaintiff's good name and reputation" from the pair's conduct "in seeking to profit from his name."

Kleiman said her deal with Autrey was "very fair" - and she was just doing what Autrey and his family had asked her to do. "It's very cut and dry," Kleiman said. "

Here is a short article with this message:  dabble at your own risk of legal malpractice.

"Bankruptcy is widely recognized by lawyers who do not practice in that area regularly as such a specialized area that they do not “dabble” in it, as many general practitioners do in other areas. Example: a lot of “GP” lawyers will offer a variety of services - drafting wills, representation in DUI and other criminal matters, personal injury litigation, and real estate, to cite but one example I know of - and will entertain “becoming competent” through self-study in a new area (as the rules of professional conduct explicitly provide), but will steadfastly refuse to file bankruptcy petitions. The reason: it’s recognized by many to be so complex that the GP is asking for trouble - i.e., a malpractice claim - if s/he “dabbles” and messes up. "

Justice Ramos of Supreme Court, New York County is handling a strange case.  Plaintiff sued American Home Products in a Phen-Fen case with Napoli Bern being lead counsel.  A conflict exists between their direct clients and the rest of the group. 

"A New York state judge has ordered a trial to determine whether the law firm that negotiated a massive settlement with the maker of banned diet drug fen-phen violated ethical rules by apportioning the settlement in a manner designed to inflate the firm's share of the funds.

In 2001, the firm now known as Napoli Bern Ripka sued American Home Products (AHP), now known as Wyeth, on behalf of around 5,000 former users of fen-phen (dexfenfluramine), a diet drug recalled by the Food and Drug Administration after studies linked it to heart valve damage. American Home settled the suit under confidential terms, though the settlement has been estimated to be over $1 billion.

But in a decision issued Tuesday, Manhattan Supreme Court Justice Charles E. Ramos said there were serious questions about Napoli Bern's conduct in dividing and distributing the settlement that needed to be addressed in a trial. He cited in particular an affidavit submitted by a former attorney at Napoli Bern who said the firm had misled clients about the process.

The lawyer, Stephen David Murakami, worked on fen-phen litigation at Napoli Bern before being terminated in 2001 and then unsuccessfully sued the firm for allegedly unpaid bonuses. In his affidavit, Murakami said the firm had told clients their portions of the settlement had been individually negotiated with American Home, when in fact they had been solely determined by Napoli Bern.

"The representation to a client that a specific dollar amount was offered in a negotiation with the defendant to settle the client's case, when in fact the settlement offer was by the client's own attorney made upon the attorney's evaluation, if true, represents a serious breach of duty to the client," Ramos wrote in New York Diet Drug Litigation, 700000/98.

According to Murakami, a major determinant in the size of a client's share was whether he or she had retained Napoli Bern directly or been referred by another firm. Napoli Bern allegedly inflated the settlement payments of its direct clients because its fees from those clients would not be reduced by referral fees.

A hearing raises the possibility that the prior settlement could be modified or even vacated. The judge said the allocation of settlement

The aphorism is that bad cases make bad law.  In this particular case, an attorney, now disbarred, has been holding on to case files, demanding payment.  So far, not so bad.  However, today, sheriffs were ordered in to look for the files, after contempt findings.

"A half-dozen sheriff's deputies raided a disbarred attorney's office last week in search of the 43 boxes of files he has refused to hand over to the law firm that has taken over his biggest case, a wrongful-death action filed by a Bronx woman on behalf of her husband, a ship-rigger who plummeted to his death at the Brooklyn Navy Yards.

For all practical purposes, the deputies came out of Kenneth Heller's office empty-handed.

"None of the records we've been seeking [were] there," said Michael S. Feldman, a partner at Jacoby & Meyers, who, with Terry D. Horner, now represents the plaintiff, "No trial notes, no photographs, no witness statements, no pleadings. The only thing that was there was the record . . . generated as a result of my efforts to obtain the file."

The dispute over the case files began in the summer of 2004. Having first lost her multimillion award and then her attorney in just over a month, Ms. Emanuel, a Bronx mother of two who had recently filed for bankruptcy, turned to Jacoby & Meyers to take over her late husband's wrongful-death claim.

The firm has spent the last two-and-a-half years trying to recover her files.

In various court papers, Mr. Heller has demanded from $2 million to more than $12 million in fees, as well as $300,000 to $400,000 in unitemized disbursements, before turning over the documents "

Keeping up to date is one way to avoid legal malpractice problems.  Here is a case from the Court of Appeals.  Notice the "immediately"

"We have recognized only two exceptions to prior written notice laws — "where the locality created the defect or hazard through an affirmative act of negligence and where a 'special use' confers a special benefit upon the locality" (Amabile v City of Buffalo, 93 NY2d 471, 474 [1999][citations omitted]). Further, "the affirmative negligence exception . . . [is] limited to work by the City that immediately results in the existence of a dangerous condition" (Bielecki v City of New York, 14 AD3d 301 [1st Dept 2005][emphasis added]). Here, plaintiff presented no evidence of who last repaved this section of the roadway before the accident, when any such work may have been carried out, or the condition of the asphalt abutting the manhole cover immediately after any such resurfacing. Next, even assuming that the special use doctrine applies to a manhole situated in a City public street, plaintiffs presented no proof of any special benefit conferred on the City. Finally, we note that the expert's opinion was not inadmissible merely because nearly four years elapsed between the accident and the